Types of Car Insurance

Considering Car Insurance: Types of Car Insurance

Part of purchasing a car is looking at the risks associated with driving a car and determining what car insurance will work best for you. Arizona requires drivers to have car insurance that meets or exceeds the following minimum coverage levels: Bodily Injury Liability Coverage: Minimum $15,000 per person / $30,000 per accident. Property Damage Liability Coverage: Minimum $10,000. As for different types of insurance products, a key to remember is the amount of risk you are willing to take, the amount of reward you want, and the cost you are willing to pay. Let’s look at a few of the most common options.  In Arizona, it is estimated about 12% of motorists are driving without insurance, which can increase the risk of you not getting coverage in an accident.

  • Liability Coverage

    • Liability coverage is usually the least expensive. It covers the basic cost of an accident when you as the driver are at fault. This often only includes the costs associated with the vehicle that you have hit. There is a limit set to the amount of damage, and liability insurance will not cover your own car expenses. Most leases and loan products do not allow a person to have liability only coverage. Some cars with extensive damage histories may only be able to be covered by liability insurance.  This is the basic necessity in Arizona, but will not cover much of what happens on the road.
  • Collision Insurance

    • Collision coverage is a step up from liability in that it covers both your liability and the cost if something else, a car or other object, hit or damage your car. This is usually the minimal coverage required by loan companies and leases. When two parties both have collision insurance, the insurance of the person at fault usually assumes liability. Collision Insurance can be helpful for when another party’s insurance does not cover costs fully. This type of insurance frequently has a set deductible.
  • Comprehensive Insurance

    • Many things can happen to vehicles outside of an accident. Comprehensive Insurance is designed to cover the costs that a motorist can encounter based on weather, theft or numerous other events beyond the control of the car owner. This insurance will vary in price based on deductible set and added benefits, and will generally be more expensive than liability and collision.  With many in Arizona not being insured, this is a recommended insurance choice.

In addition to the three main insurance products, most insurance companies offer a number of insurance options to help with many risks associated with driving a vehicle. Each product comes with a price point and rewards value, so a consumer should consider time on the road, potential risks, and costs when determining which products to include.

  • Uninsured/Underinsured Motorist Insurance

    • This added benefit can be useful when in an accident with a person who has not insured their car, a person who flees the scene, or a person with very limited coverage. This insurance is meant to cover additional costs that may occur in numerous accidents.
  • Personal Injury/Medical Payments

    • Many insurance policies limit medical costs, and injuries and treatments can exceed what the insurance has to offer. Choosing additional medical or injury coverage can eliminate the risk of having to cover extensive medical expenses.
  • Gap Insurance

    • Depending on price and value of the car, car value depreciation, and loan product, damage to a newer vehicle can exceed the amount owed on a car. If a person purchases a car with a small down payment and a sizeable loan, they may be advised or even required to purchase gap insurance that would provide the additional funding to pay off the loan in the event of an accident that renders the car unuseable.
  • Other insurance perks

    • When negotiating an insurance package, companies may offer things like rental car assistance, roadside assistance, accident forgiveness and even breakdown assistance. It is wise to explore all options and consider all cost, risks, and rewards when determining options to insure your vehicle.
  • Recreational vehicles

    • Arizona is home to some of the best lands and scenic destinations in the country. Because of this, it is important to understand options for insurance for things such as ATVs, boats, motorcycles, and other recreational vehicles. Each of these items is an investment worth protecting.

Different payment options are available for car insurance, from monthly to yearly installments as well as individualized options. Many insurance companies offer discounts for six months or more paid in full. Insurance companies can offer incentives and discounts for safe driving records. Some insurance companies may raise rates after an accident, which is why accident forgiveness may need to be considered. Also be aware that at Olson Insurance we offer product discounts for a practice called bundling, where the consumer gets their home or renters insurance, life insurance, car insurance, and other insurance-related products from the same company. Because of the use of recreational vehicles in Arizona, bundling with these vehicles and car insurance can also save you money.  Working with me as an experienced agent can help you understand products, evaluate your personal needs and risks, and consider what rewards you desire when insuring your vehicle. A car is a major investment in life, and it is important to make sure you properly protect it.

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