When I was a kid, my father used the same insurance carrier and the same insurance agent for his entire life. They say it was a different age, and I agree; it was an age where people didn’t know any better, so they paid twice as much as they should have for coverage and services that they didn’t need. Comparison shopping and cutthroat competition have driven prices to historic lows, as long as you know what it is you are paying for. So let’s make sure you do know what car insurance covers.
Liability: What People Who Care about Other People Need
Liability insurance, of any type, is protection against unforeseen damages. When it comes to car insurance, this obviously translates into any damage that you cause because of an accident or reckless driving. Liability insurance doesn’t do anything about the damage that you may have caused to your car or to yourself. Instead, it makes sure you can do the right thing by covering any damage you cause on one of those mornings from hell when nothing goes right. If, however you don’t give a damn about the damage you might cause, the government does. Almost every state requires that you carry this insurance.
Collision: What People Who Care about Their Stuff Need
Collision insurance covers all of the damage that is done to your car in the event of an accident. Barring incredible personal wealth, or a car so crappy it doesn’t warrant replacing, most people decide to carry some amount of collision insurance in addition to the state mandated minimal amount of liability insurance, because, even if it is their fault, they want to be able to repair their car. This coverage can be pricey, so sometimes it makes sense to keep a nest egg worth the value of your car instead.
Comprehensive: What Paranoid People Need
At the risk of explaining the self-explanatory, a comprehensive policy covers everything that could happen to your car other than an accident. While it provides incredible piece-of-mind, it’s also relatively pricey and usually unnecessary. Window glass coverage is the most convenient feature of this insurance.
The average person is going to have approximately no bears attack their car, and, over the course of their life, be caught in, on average, zero total sinkholes. Sure, your car could be stolen if you live in a bad neighborhood and /or can’t remember to lock your doors. Over five years, you could save enough money for a car worthy of your neighborhood instead of paying for comprehensive. If you own an expensive car, it makes sense to carry this type of insurance, but if that’s the case, you probably have enough money to buy a new one instead.
Uninsured Motorist Protection: What Victims Need
As shocking as it may be for some people to learn, not everyone follows the law or cares about the property rights of other people. If you are worried about being involved in an accident with one of these social miscreants, than uninsured motorist protection is for you. Luckily, this type of policy is relatively cheap compared to the amount of piece-of-mind that it provides.
Personal Injury: For People That Care About Themselves
If you listen to the media, you would think that people who are injured in car accidents are instantly awarded million dollar settlements. Unfortunately, even in the event of a clear-cut case of fault, legal proceedings can take years. If you get hurt in an accident, and don’t have personal injury insurance, or high quality personal health insurance, you could be stuck paying a ton of medical bills while you wait for your court awarded novelty check.