5 Types of Auto Insurance Coverage You Should Think Twice Before Skimping On


However, if you do need to use it, skimping on the important types of insurance could seriously hurt your finances. If you are trying to figure out what you need and where you can save money, you need to know which auto insurance options you shouldn’t skimp on.

Liability Insurance

Liability insurance pays for property damage and bodily caused by an accident. For example, you cause a fatal accident, the family of the deceased might want to sue you on top of what your car insurance pays out. The liability insurance will cover these costs and protect your assets. A wrongful death suit could financially bury you for the rest of your life.

Property damage is just as important. You’ve probably seen stories on the news about people driving right through buildings. You might think it could never happen to you, but you never know if you breaks will completely stop working or if you’ll lose control on the ice during winter. This is another event that can cost you tens of thousands of dollars without liability insurance.

Comprehensive Insurance

A lot of people opt out of comprehensive insurance because it drastically increases the cost of auto insurance; however, it’s important to have. It covers the cost of repairing your vehicle if anything happens to it that wasn’t caused by a collision. For example, if your vehicle is damaged by a flood, a fire, hail, vandalism, or anything else, the comprehensive insurance will cover it.

Collision Insurance

Collision insurance is important to have, but only if your vehicle is worth repairing. If you have a vehicle with more than 200,000 miles, it may be worth it to opt out of the insurance. One good idea would be to see how much it would cost to have the insurance. Take that money and put it in a jar every month. If eventually wind up in an accident, you can take the money from your jar and put it toward a new vehicle. The money would be better spent on a new vehicle than fixing something with so many miles.

Medical Payments

Medical payments is another option that is dependent on your situation. Medical payments only cover you and your vehicle passengers, they don’t cover people in other cars that are involved in the accident. If you have good medical insurance, the medical payments are completely unnecessary. However, if you don’t have medical insurance or your medical insurance doesn’t have good coverage, you could seriously benefit from having medical payments. You don’t want to wind up with stacks of medical bills totaling thousands of dollars.

Uninsured Motorists

Uninsured motorists insurance is important for everyone. While insurance is required by law, that doesn’t mean everyone is going to follow the rules. Plenty of people don’t get insurance because they can’t afford it, but they choose to drive anyway to avoid public transportation or asking for rides.

If you wind up in an accident with an uninsured motorist, the only way to get money from them is to sue. If they can’t afford auto insurance, you aren’t going to get much out of a lawsuit. Your uninsured motorist coverage will cover the damages that the driver is unable to cover, so make sure you carry it so you don’t wind up paying for repairs out of pocket.

Before opting out of certain coverage, make sure you understand what it covers. You don’t want to wind up in a bind because you don’t have insurance for a specific incident.

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