There are different options available to you when it comes time to purchase insurance. By law, you must carry a minimum amount of liability insurance. And many drivers opt to purchase the minimum. However, you can pay for full coverage, which costs more but provides more protection.
What you pay for your can insurance will depend on a few factors. While the type of vehicle you are insuring is important, it is only part of what determines your costs.
When you purchase full coverage car insurance, your policy provides you with protection from an accident. Not only will your insurance policy pay for your losses in the crash, but it will also cover any third-party claims in situations where you damaged someone else in an accident.
Full coverage insurance is actually three different types of coverage rolled into one. When you buy one of these policies, you get a combination of liability, comprehensive, and collision coverage.
Liability insurance is the most basic kind of car insurance. It ensures that you are protected from the claims of other drivers when you cause an accident. However, it will not pay for any of your losses in a crash.
Collision insurance pays for your damages when you collide with another vehicle, structure, or fixed object. Any accident that occurs when you strike something while driving is covered by collision insurance.
Other types of damage to your vehicle are included in your comprehensive coverage. This type of insurance essentially pays for any damage that is not related to a collision. It could include things like vandalism or hail damage.
State Minimum Liability
Each state requires drivers to purchase a minimum level of liability insurance in order to drive legally. Other types of coverage, like collision and comprehensive, are optional and not mandated by the government.
Each state has its own approach to this minimum coverage. Some states require drivers to carry more, while others must carry less. For example, Missouri requires drivers to have $25,000 for bodily injury coverage per person, $50,000 for bodily injury coverage per accident, and $25,000 for property damage coverage per accident. This state also requires uninsured motorist coverage, which is cheap for the protection it provides. If your state does not require it, you should consider it anyway in case you get hit by someone who does not have insurance or a hit and run.