How much insurance to take is one of the biggest questions in front of all car buyers where those buying new cars or used cars. Below is a list of the insurance policy you should consider before putting your vehicle on road.
Covering your liability: These policies will help you cover the liability when you are at a fault in a accident. This money will go to people whom you hit but will not cover people in your car.
Bodily Injury Liability(BIL): This covers the medical expenses of the people who are injured in an accident caused because of your fault. It is generally defined as “25/50” or “50/100” policy where the first number indicates the maximum amount to be provided towards a single person injury in thousand and the second indicates the maximum to be paid to all the people involved in the accident of the other car in thousand. Example a “50/100” policy will give a $50,000 maximum amount towards the injury of a single person in the other car and a maximum of $100,000 towards the injury of the people in the other car. This is required by almost all the states except New Hampshire and Wisconsin.
Property Damage Liability: This is given by a third figure like “25/50/10” where 10 indicates that a maximum of $10,000 would be given towards the damages of the other car if you are at a fault in an accident.
Personal Injury Protection(PIP): It is the total coverage you will get towards medical expenses of yourself and your passengers in an accident. In case of lost wages because of the lost time you are not able to go to work this policy can give coverage for this also.
Underinsured/uninsured motorist coverage: Incase you are hit by a person who does not have a BIL or has a minimum amount of insurance this policy would give you extra coverage in these cases.
Collision: With this policy the repair cost would be covered in case of an accident.
Comprehensive: This policy will cover all expenses if your car gets stolen or it is damaged outside an accident.
However besides this many times the minimum coverage required by a state is very low and if you are in an accident where you are at fault you might find that you have to give out much more than the $25,000-50,000 minimum amount required by the state. In this case many people go for higher insurance coverage. Generally a rule of thumb says that you should be insured equal to the total assets that you have.
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