What You Need to Know About Car Insurance

Car insurance provides protection in case you are involved in an accident. It may also help with expenses if your vehicle is stolen or damaged by acts o 서울운전연수 서울운전연수 f nature.


Most states require liability coverage. Some require additional, optional coverages as well. Your rates will depend on state requirements, your driving history and other factors like where you live.

Comprehensive Coverage

A comprehensive car insurance policy pays for damage to your vehicle that isn’t related to a collision, like theft, fire or hitting an animal. It is typically optional, but if you finance or lease your vehicle, your lender may require it.

Comprehensive coverage is more expensive than liability coverage, but it protects your car against some of life’s random events that could otherwise leave you with steep repair bills. The price you pay for comprehensive coverage depends on the value of your vehicle, where you live and your driving history as well as the deductible you choose. A higher deductible reduces your premium, but it will also mean you have to pay more out of pocket when filing a claim.

It’s important to weigh the costs and benefits of comprehensive coverage and regularly evaluate whether it is still worth it for you. In general, if your vehicle has low value or you’re already paying off your loan, you might decide to remove this coverage from your policy. However, you should reevaluate this decision every time your car insurance is due for renewal.

Collision Coverage

Car collision coverage reimburses you for the cost of repairing or replacing your vehicle after an accident with another car or object—minus your insurance deductible. It’s typically an optional car insurance policy, but your lender may require it if you lease or finance a vehicle. It’s also worth considering if you drive an expensive car, as it can protect your investment in the event of a crash.

Collision insurance does not cover damage caused by non-traffic events, like a tree falling on your car during a storm or hitting it while parked and driven away by a hit-and-run driver. That’s why it’s important to combine it with comprehensive car insurance.

While the choice to keep collision insurance is yours, some people use the 10% rule to decide when it might make sense to drop it: Does the annual cost of this coverage plus the value of your car’s market value exceed 10% of its current value?

If so, it could be better to keep comprehensive and save the collision premium for when you need to replace your car. Of course, you’ll want to talk to your local ERIE agent about the specifics of your policy and your vehicle. They’ll be able to help you assess your needs and find the right policy for you. And remember—cars depreciate, so don’t wait too long to switch!

Liability Coverage

Liability coverage pays other people for their losses in an accident you cause, up to a maximum limit. It typically covers things like medical bills, pain and suffering, lost wages and funeral costs. It may also cover the cost of property damage, such as a fence or building that’s damaged by your car. Most states require you to carry a minimum amount of liability car insurance.

Your car insurance policy’s liability limits are often listed as three numbers separated by slashes, for example “bodily injury per person / bodily injury per accident / property damage per accident.” Some insurers offer a more flexible option called a combined single limit, which is one number that can be used flexibly to cover both bodily injury and property damage. This type of coverage usually costs more than the traditional split limit option.

Liability coverage won’t pay for your own medical bills or repair costs for your vehicle, but you can add personal injury protection (PIP) and collision coverage to your policy for these expenses. You can also get uninsured/underinsured motorist coverage, which pays for injuries you sustain if you’re hit by an uninsured or underinsured driver. In addition to these basic types of coverage, some insurers offer gap insurance, roadside assistance and rental car reimbursement. These options vary by state and insurer, so check with your agent to find out what’s available in your area.

Uninsured/Underinsured Motorist Coverage

It’s scary to think about, but some drivers on the road don’t have car insurance. Uninsured/Underinsured Motorist coverage helps pay for damages and medical costs if you get into an accident with one of these drivers. It’s typically relatively inexpensive to add this coverage to your policy and you can choose how high of limits you want.

If you have Uninsured/Underinsured motorist coverage and you’re in an accident with a driver who has no car insurance, your company will reimburse you for your covered damages up to your policy limits (after applying your deductible). This is similar to how No Fault works, but it covers accidents with drivers who don’t have any car insurance or don’t have enough car insurance.

Underinsured motorist coverage (UIM) pays your medical bills, pain and suffering, lost wages if you’re unable to work and funeral expenses after an accident with an at-fault driver who has minimal or no liability insurance. It also covers damage to your vehicle after an accident with a driver who doesn’t have enough liability coverage to pay for all of the repairs or cover your property value (after paying a deductible). It can even cover you as a pedestrian or cyclist in certain states and situations. This type of coverage is optional and available as an addition to your auto policy.