How to Choose the Best Car Insurance Coverage

Car insurance companies offer a positive deluge of car insurance policies. While it is great to have options, many car owners do not know how to determine which coverage options are best for them. Below are descriptions of several insurance options ranked by importance.

  1. Liability insurance. If you own a car, you must have liability insurance. This is the minimum requirement and provides coverage if you injure another individual or damage property as the result of a car accident.
    1. Tip: If your financial situation allows for it, invest in more than the bare minimum to safeguard your assets.
  2. PIP and MedPay. This provides coverage for medical costs for yourself and other individuals in your vehicle in the event of an accident.
    1. Tip: This type of coverage is vital if your health insurance is lacking.
  3. Collision and comprehensive. Unless you buy your car outright, you need this type of coverage. It offers protection from total loss events so you do not have to pay the remaining cost of the loan out of pocket. This applies to individuals who lease their vehicles as well.
    1. Tip: This type of coverage is not always necessary depending on your car’s worth. If your vehicle’s value is minimal, you can save money by foregoing this coverage. However, this is not the norm so drivers should discuss their collision and comprehensive policy with their insurance provider first before eliminating it. If your vehicle is still worth a considerable amount of money, consider a higher deductible. This can reduce overall insurance costs—just be sure you can afford the deductible if you need to file a claim.
  4. Uninsured Motorist. While state laws indicate drivers need insurance, plenty of people flout the rules. If an uninsured/underinsured driver causes an accident, you may have to cover the cost. Investing in this type of insurance protects you from such events.
  5. Guaranteed Auto Protection (GAP) insurance. This type of insurance is applicable to anyone who owes more on their car than what it is worth. The most common example of this situation is someone who just purchased his or her car. If you are in an accident shortly after buying your vehicle, your standard insurance will only cover the value of the car, leaving you upside down on your loan.
    1. Tip: Once your car loan amount is less than what your car is worth, you can cancel this coverage.

These are some of the most common types of auto insurance coverage options available to car owners. The Reilly Company can help drivers determine which types of coverage are best for them and their financial situation. We can also discuss specialty insurance policies such as roadside assist, rental reimbursement, and personal umbrella insurance. To learn more, contact us today.