Choosing the Level of Auto Insurance Coverage You Need Can Be Confusing

Choosing the level of coverage that you really need is one area of auto insurance that can be and often times is very confusing if you do not know what you are looking at or simply do not understand what is what in auto insurance terms. You might only need and want the minimum liability coverage because you have an older vehicle that does not need to be covered under Comprehensive so that you are not paying far more than you really need to be paying.

How would you know if you need a basic liability coverage policy? There are many different things that go into the insurance company’s decision as to whether you only need basic liability coverage or do you need more extensive coverage altogether. One of the first things that is taken into account is the age (in terms of year and make) and condition of the vehicle in question as well as the type (model) of vehicle that is to be insured. The older the vehicle is, the more likely it will be that you will not need anything beyond basic liability coverage to comply with the laws in your area.

What types of vehicles would need to be covered under a Comprehensive policy; and what do both Comprehensive (commonly referred to as “Comp” in the auto insurance industry) and Collision really cover? You will need to have Comprehensive and Collision on your insurance policy if you have a brand new vehicle or are making payments on the vehicle to a bank or lender of any type. Comprehensive covers damage that is done to your vehicle as a result of hitting a wild animal or things like tree limbs/trees or power lines hitting your vehicle. Collision covers the damage to your vehicle and any other vehicles that you hit in an accident.

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