Although there’s no set amount of auto insurance that’s perfect for all drivers, it all comes down to the type of car you own and the coverages you’re looking to get. Below are some of the most common types of coverages you should add to your policy. Also, you can add on other “optional” coverages as you see fit.
Bodily Injury Liability (BIL)
BIL covers you financially if you cause a car accident that injures another person. Most BIL policies are either a 20/50 or 100/300 policy. These are the numbers of the total financial amount that your policy would cover if one person is injured and the total for the injuries of all car occupants.
Personal Injury Protection (PIP)
Basically, PIP covers you if you’re injured in a car accident. If you already have health insurance, you may not want this coverage since your health insurance will already cover your injuries. But, just make sure that your state doesn’t require it.
Liability for Property Damage
Each state has its own limit as to the minimum amount of liability you have to carry. However, this minimum amount is often not enough to cover you in a serious crash. You could easily get stuck with a huge repair bill if you hit another person’s vehicle and total it since cars can cost upwards of $30,000 or more.
Medical Payments Coverage
Medical payments coverage is almost the same thing as personal injury protection. But, when personal injury protection stops, medical payments coverage kicks in. For instance, if the medical costs for the driver go above the PIP amount, you can use medical payments coverage to pay part or all of the costs remaining, depending on the coverage amounts on your policy.
This is particularly important if you live in a state where PIP covers only a certain amount of the overall medical costs. So, if your coverage only pays for 80 percent, you would be responsible for the remaining 20 percent. Medical payments coverage provides you with that extra layer of coverage.
Do a little shopping around to get an idea of the rates of major insurance companies since insurers could vary by hundreds of dollars for the same vehicle and driver. It’s wise to work with an independent insurance agency who can provide you with multiple auto insurance quotes from top insurance carriers. This will help you get “cheap auto insurance”, but the coverage you need.
Be sure to build a policy that will provide you with optimal coverage. Don’t forget to ask about discounts which could save you money.