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What types of coverage do I need?


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When selecting which kind of auto insurance plan will best fit you, there are many questions you must ask yourself. First off you will need to find out how much liability you really need. You must find out how much you would be willing to pay, in the event of an accident. Generally the more liability coverage you have, the higher your premium will be. In all insurance policies, you must have some type of liability insurance, it does not matter how much liability you have, but you must have it.


Something that is optional for you to have on your policy, is collision insurance. Collision insurance is very useful to have on your policy, and will cover your vehicle in the event of an accident. Most people only have liability, but if you are driving around a brand new car you probably will want to have collision coverage. When purchasing a new car, some dealers can actually require you to have collision insurance on the vehicle, especially if it is a lease.


Like anything else the collision insurance will make your policy's premium higher, and the deductable rate that you choose has a factor on your premium. A general rule is to think about how much you would be willing to pay out of your pocket if something were to happen, that number should be close to the deductable you decide on.


If you are driving a new car, it is wise to have collision insurance on the vehicle. Then as the vehicle gets older, and is paid off, you may consider dropping the collision portion of your policy. Once you drop the collision insurance for an older vehicle, the cost of your premium will lower, and you may be able to lower the cost of your deduction. However, if you were involved in an accident that was your fault, your vehicle is no longer covered.


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