The most important car insurance Coverage

Although there are many types of coverage available for car insurance, you may be wondering which is the most important? Arguably, the most important car insurance coverage is the one you need at the time of damage, but we can never be sure what that coverage will be, as every accident is different. We know that certain coverage is required by law, and other coverage is available to us depending on our personal circumstances.

Here are some things to consider when determining what coverage you need and where you can be more flexible.

The most important car insurance

The most important coverage should be the state's minimum liability and property damage coverage. More than anything else, you need to get car insurance to be able to drive legally. You risk losing your license and being fined if you drive without one. You can get into an accident without liability insurance and face huge penalties, including bills for damages.

Liability and property damage coverage is there to protect other drivers on the road from damage you cause. Your auto insurance policy probably lists liability as 20/40 bodily injury as an example. The 20 is a placeholder for how much to pay per person for medical expenses, pain and suffering, with a value of $20,000. 40 is a placeholder for how much you pay for medical expenses, pain and suffering per accident, and is valued at $40,000.

Property damage covers the property of others. For example, if you hit another person's car or damage city property, such as a guardrail or traffic sign, your auto insurance policy will cover the damage up to the limits listed on the policy.

For your own financial protection, it is important to insure other people's property and medical expenses. Without it, you can sue for damages.

Other important coverage

You also want to protect your own property. You need to purchase physical damage coverage to protect yourself from major car repair expenses if you damage your vehicle or other external factors cause damage to your car.

Comprehensive insurance will reimburse you for non-collision damage. This includes but is not limited to deer, rodent, glass damage, fire, theft, vandalism and storm damage. There is usually a deductible.

Collision coverage pays if your vehicle is damaged in a collision, be it with another vehicle, a tree or a letterbox; does not matter. Collision pays by deducting your deductible.

Car insurance extras

Car insurance policies offer many different optional coverages that can prove to be important. Extra covers include incomplete insurance, rental insurance, roadside assistance, custom equipment, OEM approval, minor offense waivers and accident waivers. While it's very possible to cover these costs out-of-pocket instead of purchasing coverage, some of these optional coverages can provide significant financial protection.

Every car insurance has its place on certain policies. It really depends on the driver and what your expectations are of their policy. It's good to reduce your insurance costs by reducing coverage, but be prepared for additional costs if an accident occurs.