Auto insurance - what is really needed?
The question of insuring own car is inevitable for the citizens of most states of the US because they are required to do so by law. And even in those few states where vehicle insurance isn't a legal requirement it is also more convenient to have it in order to protect the auto from in various situations. However, when purchasing an insurance policy people rarely stop to think what do they really need when insuring the car and what can be left behind. Depending on what will be included into the policy it can turn out to be rather expensive or on another hand quite affordable. So it's really important to learn what is a must when insuring your car and what can be considered only as an option.
First thing you have to understand is that the law requires you to carry only a single type of insurance coverage with your policy. Third party liability coverage, which includes body injury and property damage, is used to settle the liability towards the other party involved in an accident that you have caused. Knowing that such situations involved significant costs and can be rather litigious it's much easier for the authorities to impose everyone to have third party liability rather than deal with thousands of court cases created by such events.
An important thing you have to know about third party liability coverage is that it has its minimum requirements. Each state sets a minimum amount of third party liability a policy should carry and if you go below this limit your policy will simply become invalid and you will face the penalties as if you weren't insured altogether. The limits are set according to local medical and repair costs so that the policy would be able to cover an average accident. However, it is recommended to get more third party liability coverage in order to eliminate the risk of being under insured in case of a serious car accident that would involve higher costs.
Besides third party liability coverage all other coverage types are purely optional and you are free as both to include and exclude them from your policy depending on your needs. However, there's a particular situation when you may be obliged to purchase additional coverage types. When financing your car through a loan most lending institutions will obliged you contractually to include collision and comprehensive coverage to your policy. These two coverage options are often bundled in a single product and apply regardless of who was at cause of the accident. Collision coverage pays in case of a collision with a vehicle or any other moving object. Comprehensive coverage deals with damage resulting from situations other than collision such as fire, theft, wind, storm, riots, explosions and others. Including these forms of coverage will make your auto insurance policy more expensive but there's no way going around it if you're taking a loan. Besides with these auto insurance options you get some peace of mind regarding your vehicle because it will be protected in a wide range of situations.