7 Types of Car Insurance: Which Ones Do You Really Need?

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The cost of even a small repair makes car insurance nice to have. When we start adding in the medical expenses that can go with a car accident, insurance becomes downright necessary. In many states, insurance is even a legal requirement before you can drive your car out on the road. But a wide variety of options are available when it comes to insurance — there are actually seven different types of car insurance you can choose from in most cases — and it can be difficult to decide just what type of auto insurance is the best choice for you, your vehicle and your budget.

  1. Liability Insurance

When your state requires that you carry some sort of insurance for your car, they’re usually looking for liability insurance. In the event that you are in a car accident and the police decide it is your fault, liability insurance covers the cost of repairing any property damaged in the crash (such as cars or buildings), as well as the medical bills from resulting injuries. Most states have a minimum requirement for liability insurance coverage that you absolutely must have.

  1. Collision Insurance

The biggest problem with carrying only liability insurance is that if there is an accident, you may wind up without the money to repair your own vehicle. A collision insurance policy makes it so that someone else — your insurer — will pay for the repairs to your car. If your car is totaled in an accident, a collision insurance policy will pay out the value of your car. While the payout won’t cover for a brand new vehicle, the sum will equal approximately what the car was worth before the accident.

Collision car insurance comparison isn’t a must-have, as far as insurance goes. If your car is older, it may not be worth paying for insurance, especially if you can work on saving up enough to replace the car if necessary. If you have a good-sized emergency fund, you may be safe without collision insurance. If you’ve chosen a more expensive car or your car is relatively new, however, collision insurance can help you sleep much better at night.

  1. Comprehensive Insurance

Liability and collision insurance policies exclusively cover car accidents. If something else happens to your car — weather damage, theft, an animal collision — you won’t be A comprehensive insurance policy is one of those things that are nice to have. However, coverage can be pricey and may not be worthwhile if your car would be relatively easy for you to replace, if you had to. Note though that you can bring down the price of this policy if your vehicle has an anti-theft and tracking devices installed.

  1. Uninsured Motorist Protection

Just because the law requires everyone to have insurance doesn’t actually mean that’s the way things work out. Even if a driver has a liability insurance policy, most states have relatively low minimums that may not cover all of the expenses that can go along with an accident. One of the worst things that can happen is that you get stuck with the bills in an accident that wasn’t even your fault.

  1. Medical / Personal-Injury Protection

The costs associated with treating injuries after a car accident can be astronomical. In order to cover those costs, medical and personal-injury protection is available. No matter who is at fault, such protection will cover your medical bills along with those of your passengers.

  1. No-Fault Insurance

So far, no-fault insurance is available in twelve states. This option covers injuries and property damage, no matter who is ultimately responsible for a given accident. The decision to choose no-fault insurance really depends on what other insurance options are available to you and at what price. Some no-fault policies can be expensive, making it more cost-effective to choose other options, especially if your car is inexpensive to replace.

  1. Gap Insurance

If you are still making car payments, gap insurance may be a good choice. It’s meant for drivers who still owe money on their cars and need to pay off the vehicle if it is totaled in an accident. It’s generally a good choice if you owe more on your car than you could easily pay off on short notice.

Gap insurance is especially worthwhile if you owe more on the car than you could get for it if you sold it today, since many insurance policies will only cover the value of

[Source: http://moneyning.com/budgeting/7-types-of-car-insurance-which-ones-do-you-really-need/%5D

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