Only Using As Much Car Auto Insurance As Necessary

If you drive and have a car, of course you need car auto insurance. In any state, it’s necessary to have at least liability insurance for both personal injury and property damage. This is your responsibility to carry as a driver in the event you’re involved in an accident and are found at fault. How much of this insurance you have to carry varies state-by-state (for example, $50k property damage plus $25k per person in personal injury per accident). Check with your state to see how much insurance you have to carry, since most states do have a minimum amount that is required.

Whether or not you need another type of car auto insurance coverage is debatable. There are two other major types of insurance, collision and comprehensive insurance. It should be noted that liability insurance does not cover anything about you or your car. This insurance is just to provide monetary damages to the other party for property damage or personal injury if you’re the one deemed at fault in the accident. Of course, the other party is also carrying liability insurance — or should be — so that you are paid damages in the event they are at fault in the accident.

Collision and comprehensive insurance, however, protect your car in the event of an accident or damage, regardless of who is at fault. With collision insurance, this is specific to car accident damage. This type of insurance pays for damages to your car regardless of who’s responsible for the accident.

Comprehensive insurance, by contrast, pays for damages to your car that, as a result of non-accident damage. For example, if your car is vandalized or if you are in a hailstorm and the car has body damage as a result, comprehensive insurance will pay for this type of damage.

These days, car insurance companies are very competitive and want your business. If you’re a good driver especially, you should be able to get a very good rate for decent coverage. Many companies offer discounts for various things, like your son or daughter carrying at least a 3.0 grade point average at school, or having multiple policies with them, such as your car insurance and your home owners insurance. However, another way you can save yourself money is to only carry the exact insurance you need.

If your car is paid off and is more than two years old, you should not be carrying comprehensive or collision insurance, likely. This is because you’ll likely pay more in premiums than you would simply if you replaced the car or repaired it, as applicable. A better bet in that case is to simply carry liability insurance and to drop comprehensive and collision insurance. This can save you many hundreds of dollars a year.

However, if your car is new or less than two years old and is not paid off, you should carry comprehensive and collision insurance so as to cover the car at replacement value. In that case, the money you’re paying in premiums is worth it because you won’t be putting out full price to replace a car out of pocket.

Know your rights and know the laws of your state. If you carry just the car auto insurance you need and no more, you’ll save yourself a lot of money and still have all of the protection you need.