Auto Insurance Policy Basics To Help You With Your First Policy
Purchasing auto insurance for the first time can be an exciting experience. While you’re excited to get on the road, it’s important to look over your auto insurance policy carefully as it contains a lot of valuable information. Here’s a breakdown of everything to consider.
Owning your first car is a significant milestone. You can enjoy those common feelings of freedom and independence. However, there are a lot of responsibilities associated with being a car owner. Everything starts with finalizing your auto insurance policy. If you are working with a budget, you may opt to purchase the minimum amount of coverage. This ensures that you will have money left over to meet your other expenses. In most cases, though, it’s recommended that you avoid purchasing the minimum amount of coverage, as that could lead to long-term issues if your car suffers significant damage.
- Liability Coverages
In most states, you are legally required to add liability coverage to your auto insurance policy. Property damage liability covers you if you damage a building, fence, garage, or other property with your vehicle. Property damage coverage will help cover the necessary repairs and other losses that you would be responsible for otherwise. Bodily injury liability coverage protects you if you accidentally hurt someone with your vehicle. This type of coverage takes care of the injured party’s medical treatment and your legal fees if they decide to sue. Be aware that this type of coverage includes limits for every accident and the number of injured in the accident.
- Vehicle Coverages
You have the option to add collision and comprehensive insurance to your auto insurance policy. Collision coverage can help you repair or replace your vehicle if it gets damaged in a collision with another vehicle or object. Collision coverage is a mandatory addition to your policy if you lease or finance your vehicle. While looking over your collision coverage, it’s recommended that you assess your policy limit and deductible. Your policy limit is the maximum amount your insurance company will pay towards your claim. This is normally determined by looking at the actual cash value of your vehicle minus the depreciation. Your deductible is the amount you are responsible for covering before your insurance takes the remaining balance of the covered damages. If you opt for a higher deductible, that will reduce your monthly premium.
Comprehensive coverage protects your vehicle in different situations that aren’t caused by an accident. The policy assists you if your car has been stolen, damaged by severe weather, or destroyed in a collision with a cow or deer. Comprehensive coverage also includes a policy limit and deductible. You will likely also be required to add this coverage to your auto insurance policy if you don’t own your vehicle. GAP coverage is another option to consider. GAP coverage steps in if your vehicle suffers damage and a balance is left over even after your insurance steps in. Your agent may also recommend purchasing uninsured/underinsured motorist coverage. This type of coverage protects you if your car is damaged in a collision with somebody who does not have insurance. You’re also protected if their policy limits aren’t high enough to cover the damages. The coverage can assist with repair costs and your medical treatment.
Consult With Massive Insurance & Financial Services
Figuring out which coverages to add to the first auto insurance policy can be overwhelming. If you have any questions, contact the experts here at Massive Insurance & Financial Services, and we will assist you.