do you really need the extra insurance?

Buying Car Insurance: What You Need To Know About Optional Coverage

by Rick Mcguinness

When you purchase a car insurance policy, the law will require that this policy includes liability coverage. This liability coverage will be made up of both property damage and bodily injury coverage. Any additional coverage that is included in the policy is considered optional. While you may be tempted to purchase a policy that includes nothing more than the legally mandated coverage in order to try and save money, you should know that including some types of optional coverage will often be in your best financial interest. Below you can learn more about the three main types of optional coverage which you may wish to consider.

Collision And Comprehensive Coverage

The purpose of liability coverage is to cover the cost of repairing another driver's vehicle or to pay for the medical cost for another driver if you should ever cause an accident. Unfortunately, this coverage will not provide you with any protection for damages to your own vehicle or any medical care you may require as the result of an accident. In order to ensure you are covered in these situations, you will need to purchase collision and comprehensive car insurance. This type of optional coverage will cover the cost of repairs to your own vehicle and any medical costs you incur after being in an accident if you are at fault for causing that accident. This type of optional coverage will also provide you with financial protection if your vehicle is ever damaged by severe weather or if it is ever stolen. 

Uninsured Motorist Coverage

It is important to know that all drivers are required under the law to have car insurance. With that being said you also need to know that not all drivers follow the law. This means that at any given time there are drivers on the road who do not have any car insurance. If one of these uninsured drivers was to hit you, you would not be able to collect an insurance settlement unless your car insurance policy includes uninsured motorist coverage. 

Underinsured Motorist Coverage

Just as there are drivers on the road who do not have any car insurance, there are also many drivers who do not have an adequate amount of insurance coverage to cover the expenses associated with a major accident. If you are unable to collect adequate compensation from the other driver's insurance company, having underinsured motorist coverage will allow you to collect any remaining costs from your own insurance company.

To learn more, contact a car insurance provider in your area.