Car Insurance: What You Need and What You Don't

Let's face it, there are a lot of unsafe motorist on the road. You never know when some idiot's going to decide he's just sober enough to drive or when some 16 year old kid is going to pay more attention to his cell-phone than the motor vehicle he's operating. Make sure you have the right types of automobile insurance for the vehicle that you're driving.

Liability - This is the most important part of car insurance, yet most people pay very little attention it. This insurance pays damages to property and for physical injuries in an accident that's your fault. Every motorist should have a good liability policy, and if you have a lot of assets, consider getting an umbrella policy which will provide additional protection on top of your regular liability limits.

Collision - Collision coverage takes care of damage to your vehicle from any accident that is partially or completely your fault. You'll usually be responsible for a deductible of $250 or $500 and your insurer will pay the rest. Collision insurance usually makes sense if you have a vehicle that's worth $5000 or more.

Comprehensive - Comprehensive coverage takes care of just about everything not covered everywhere else. It'll take care of your vehicle if someone break's into it, it gets stolen or even if the windshield cracks. The exact benefits depend on your particular policy, so be sure to read it carefully to know what you do and do not have covered. Comprehensive insurance is often packaged with collision insurance.

Uninsured Motorist - Some people just don't carry insurance, often in violation of state law. As much as we'd like to pretend this issue doesn't exist, we have to protect ourselves in the event that we get in an accident with an uninsured motorist. If they can't afford basic liability insurance, chances are they don't have the money to pay you either. This is where uninsured motorist coverage comes in. This coverage will pay for your vehicle repairs in the event that you get in an accident with someone who does not have liability insurance. It is a must have for everyone on the road.

If you have a car loan... - If for whatever reason you don't carry insurance, the lender will often buy insurance for you at five or six times the going rate. Make sure you carry at least the types of insurance your car loan requires so that you don't get stuck with a huge bill to the company that provided you a car loan.