You got your driver’s license and you have a car, but before you can hit the road you need to figure out what insurance coverage you need.
Accidents can happen anytime and anyplace. Most collisions take place within a few miles of your home. This is where you spend the majority of your time driving on local streets.
It’s imporant to purchase the best coverage you can afford. The insurance you buy not only provides financial compensation to anyone who gets hurt in a crash that you are at fault for, but it can protect you and your passengers if the other driver’s insurance is inadequate and they are at fault.
Your insurance agent will likely ask you what coverage you would like to have. Here is the basic car insurance terminology you’ll need to understand before you decide how much you can afford to spend:
- Collision Coverage: Covers damage to your own vehicle after a collision with another motorist, object or structure.
- Comprehensive Coverage: This pays for damage not caused by a collision such as a flood, fire, or if it is stolen.
- Uninsured/Underinsured Motorist Protection: Pays the insured driver for property damage and injuries resulting from a crash if the other party has no insurance coverage.
- Liability Coverage: If you are at fault for a crash, this pays for the damages to the other person’s vehicle or property.
- Personal Injury Protection: This coverage pays all the medical bills for you and your passengers.
- In California you are required by law to carry both of these coverages: Bodily Injury and Property Damage.
- Bodily Liability Coverage: $15,000 per person/$30,000 per accident minimum. This coverage pays for the injuries resulting from a collision you caused to someone else or the injuries you received from the accident.
- Property Damage Liability Coverage: $5,000 minimum is required in California This coverage pays for the damages to other people’s car or property that was destroyed during an accident.
The amount you pay for insurance coverage will depend on your driving history. If you have a bad driving record you will be charged a higher premium for your car insurance than someone with a good driving record. The place where you live and drive most often is also a factor as well as age and experience.
Once you have called a few insurance companies and compared rates, you may choose to pay the full annual premium or make monthly payments. Keep a copy of your insurance coverage statement in your vehicle at all times in case you need it.