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Minimum Coverage Options Available with Your Auto Insurance

General Auto Insurance / Minimum Coverage Options Available with Your Auto Insurance

According to the National Association of Insurance Commissioners (NAIC), just over 70 percent of insured drivers buy collision coverage and just more than 75 percent acquire comprehensive coverage on top of their liability coverage. I.I.I. points out that a consumer does not need either collision or comprehensive coverage to legally operate a car, but both coverages offer important financial protections and they may be required if the driver financed the purchase of the vehicle through a bank or another financial outlet.

Keep in mind that nearly every state requires drivers to purchase a minimum amount of liability coverage. There is a good chance that drivers will require additional liability than a state requires due to the fact accidents cost more than the minimum limits. When a driver acquires only the minimum amount of liability, it means the driver is likely to pay more out-of-pocket, whereby costs can be excessive.

Another item of interest to drivers is that along with liability coverage, they are recommended to consider purchasing collision and comprehensive coverage when acquiring an auto insurance policy.

Some quick tidbits on collision and comprehensive coverages:

  1. Collision coverage reimburses you for damages to your auto resulting from potholes. It will also pay for damage to your vehicle resulting from a collision with another vehicle, object or as a result of flipping over. In the event you are at fault for an accident, your collision coverage reimburses you for the costs of repairing your car, subtracting the deductible. In the event you’re not the cause of the accident, your insurer could attempt to recover the amount it paid you from the other driver’s insurer. Should your insurer be successful, you will also be reimbursed for the deductible you paid your insurer.
  2. Comprehensive coverage typically covers you for damages resulting from something other than a collision with another vehicle, however potholes are an exception. This collision will reimburse you for vehicle losses incurred by floods along with other perils like windstorms, fires and vandalism. Some companies offer glass coverage as part of their comprehensive package and will repair or replace a cracked or shattered windshield. Some insurers have separate glass coverage, which can be bought with, or without, a deductible.

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Minimum Coverage Options for Auto Insurance

Collision and comprehensive coverage offer important financial protections.

Collision insurance may cover:

  • Damages resulting from potholes
  • Collisions or flipping over
  • Driving safely and carefully
  • Repairs for at-fault collisions

Comprehensive insurance may cover:

  • Losses incurred by natural disasters
  • Vandalism
  • Glass coverage and windshields
  • Repairs for at-fault collisions

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