What is covered under automobile insurance?
An automobile insurance policy is designed to provide you with a level of protection against property, liability, and medical costs if you are involved in an accident:
- Property coverage pays for damage to or theft of your car.
- Liability coverage pays for your legal responsibility to others for bodily injury or property damage. Most states require car owners to purchase a minimum of bodily injury and property damage liability insurance.
- Medical coverage pays for the cost of treating injuries, rehabilitation, and sometimes lost wages and funeral expenses.
Comprehensive & Collision Coverage
Comprehensive: Covers your vehicle, and sometimes other vehicles you may be driving, for losses resulting from incidents other than collision. This coverage is not required by a state, but a lender may insist that you carry it until your loan is paid off.
Collision: Covers damage to your car when your car hits, or is hit by another vehicle or other object. This coverage is not required by a state, but if you have a loan or a lease, then the lien holder will require it.
What about rental car insurance?
The best time to make the decision about whether you will need extra rental car insurance is before you’re standing at the car rental counter.
Collision Damage Waiver (CDW), or Loss Damage Waiver (LDW), relieves you of financial responsibility if your rental car is damaged or stolen. If you have comprehensive and collision on your own car, you most likely do not need to purchase CDW from the rental car agency. Additionally, your credit card company may include some collision and theft protection if the rental car is paid for with your card. If your credit card doesn’t offer coverage for loss of use, you may want to consider purchasing CDW from the rental agency.
Liability insurance provides excess liability coverage of up to $1 million for the time you rent a car. Rental companies are required by law to provide the minimum level of liability insurance required by your state. If you have adequate liability coverage on your car or an umbrella policy on your home/auto, you may consider forgoing this additional insurance.
Insuring a teen driver.
If you’re the parent of a teenager who is getting ready to climb behind the steering wheel, insuring your new driver can be an expensive endeavor. To help manage costs and find the right solution it is important to consider the following:
- Adding them to your auto policy
- Raising your deductibles
- Student discounts
- A new versus used car
Online Defensive Driving
Complete your 6-hour online defensive driving course, on your own time, to save up to 10% on your insurance and reduce points on your license (available in select states). No more scrambling for special reservations on a weekend, only to spend your day off in a crowded classroom.
Click on a state below: