Although it is possible to own a vehicle without having insurance, it’s not legal to drive on the roads without having an insurance policy in place. Each state decides what types of insurance will be compulsory and will have a legal minimum that drivers will have to adhere to in order to be considered a legal driver.
This is why the minimum requirements for auto insurance in your state may not offer you total cover.
Due to this, you may be required to look at additional coverage which can be added to an insurance policy
Here’s list of 7 policies you absolutely have to consider when you own a car:
1. Liability Cover
Liability insurance is a standard element of most auto insurance policies and mandatory in all states. This policy will protect you and your passengers should you cause and accident and responsible for the medical bills or repair costs of a third party. Without this type of cover, you could be in a lot of trouble. Unfortunately, at least 1 in 8 drivers do not adhere to the legal minimum requirement while some do not have any insurance at all.
2. Underinsured and Uninsured Motorist Cover
Should you ever be involved be in an accident that someone else has caused, you may find yourself in a tough position if their policy is not adequate to cover your losses. It gets even worse when they have no insurance at all.
If you don’t have collision coverage, you might want to consider Underinsured Motorist (UM ) and Underinsured Motorist (UIM) cover.
This will pay for your medical bills or repairs when the other driver has no insurance, or their insurance does not have adequate liability coverage to cover your claim.
3. Collision Coverage
Collision coverage will typically pay to fix or replace your car when it was involved in an accident with another car or stationary object. This includes parked cars, trees, street lights, telephone poles, or guard rails. Collision insurance usually does not cover damages to your vehicle that occurs when it’s stationary. This includes storm damage or damage from a falling object. Although it is not a requirement in most states, lenders will most probably require that you have this type of insurance policy.
4. Comprehensive Cover
Comprehensive cover is one of the higher levels of protection you can get if you own a vehicle. If your car is damaged due to an accident, natural disasters, theft and vandalism, or even falling objects, comprehensive cover will come in handy. The limit on this policy is typically the actual cash value of your vehicle. If you have an older vehicle, comprehensive cover may not make sense as your deductibles may actually exceed the total value of your car.
5. Personal Injury Protection (PIP)
With PIP insurance, you can receive maximum benefits even if you didn’t cause the accident. PIP coverage can include medical expenses, lost wages, rehabilitation costs, funeral costs, and more. Even though it is only a requirement in 13 states, it is still highly recommended that drivers have PIP.
6. Towing and Roadside Assistance
This type of policy can be an affordable way to make sure help will be on the way when you need it most. If you have an emergency breakdown, a roadside assistance policy will help you with towing, tire changes, battery service (jump-start), labor costs of a mechanic (not parts), a lockout service, as well as gas, water, and oil delivery. It will also assist with car rental should your vehicle be out of order.
7. GAP Insurance
The very moment that you drive your new car away from the lot, it immediately loses value. During this time, the car will in all probability be valued less than what your actual outstanding loan amount is. Should you be in an accident during this period, you may be at a huge financial loss without GAP cover. This policy will pay out the difference between the actual value of the vehicle versus the total loan amount still outstanding should you ever find yourself in this unfortunate situation.