When you’re selecting your car insurance coverage, it can be tempting to opt for the absolute bare minimum, but doing so could cost you in the long run. You could end up with a pile of repair bills, a broken vehicle, and few ways to get back on the road. Make sure you understand your options before you limit your coverage. For example, it’s important to understand the difference between liability coverage and comprehensive and collision coverages.
While state minimums vary, you’re usually required to have some level of Bodily Injury Liability and Property Damage Liability. If you cause an auto accident, these coverages would pay for the other driver’s medical expenses, the damage done to their vehicle, and if needed, your legal services. Liability coverage won’t pay for the damage done to your vehicle.
Ask yourself, if you were in an accident, could you pay for the repairs to your car out of your own pocket? That’s where collision and comprehensive coverage could help.
Collision coverage would pay for your vehicle to be replaced or repaired if it hit another object (like a tree or a guardrail), if it overturns in an accident, or it if is hit by a “hit and run” driver. Let’s say it’s raining and the roads are slick. You lose control of your car and roll into the median. With collision coverage, your insurance would pay to have your vehicle fixed or replaced.
Comprehensive coverage would pay for your vehicle to be repaired or replaced if it is stolen or damaged in an event other than a collision (like a fire, natural disaster, or contact with an animal). For example, you’re on a road trip and a bird smashes into your windshield, putting a huge crack in it. With comprehensive coverage, your insurance would pay to have your windshield replaced.
Keep in mind, these coverages may include a deductible. This is a portion of any bill that you pay before your insurance kicks in. So, if you have a $500 deductible and you’re looking at a repair bill of $1,500, you’d pay $500 and your insurance company would pay $1,000.
If you fear that your savings or emergency fund is not large enough to pay for your vehicle to be fixed or replaced in the event of an accident, you might want to consider adding both comprehensive and collision coverage to your auto insurance policy, and make sure that the deductible you choose is manageable.
Without these coverages, you could be stuck with a handful of bills and no wheels. Having only liability may keep you legal, but you could be out of luck and deep in the hole for damages to your own car. To see if you have comprehensive and collision coverage on your policy, call your Direct agent at 1-877-463-4732.