What Car Insurance Do You Need?

What Car Insurance Coverage Do You Need?

When you need to purchase car insurance in California, you have different coverage options. Some people might be tempted to have the bare minimum to save money, but this can be costly later on. You should consider more than simply saving money on premiums and instead learn about the types of insurance coverage you need. 

Why Car Insurance is So Important

All but two states require drivers to have at least minimal liability insurance, and if you do not have mandated coverage, it can result in serious problems. You might face fines, have your license suspended, or even get arrested for driving without necessary insurance. 

Outside of ramifications with law enforcement, you can also be on the hook for significant funds if you cause an accident or get hit by another uninsured driver. It is important to have the proper coverage to avoid costly penalties or liability. 

Terms to Know

Understanding automobile insurance begins with knowing important terms. These include:

1. Premium = This is the regular payment that you make to ensure you have ongoing coverage. 
2. Deductible = This is the amount you might have to pay before your insurance policy covers the rest of your repairs. 
3. Policy limit = This is the maximum coverage you will have in a particular accident, and you will be responsible for anything over this limit. 

Types of Car Insurance

Not every car insurance policy is the same, and different types of policies provide coverage in different situations. The following are the major types of coverage:

Liability coverage

This covers repair costs or medical bills for others if you cause an accident. This is the required coverage in almost every state, and there are minimum requirements. However, the state minimums rarely provide enough coverage for a serious accident. Always consider whether you should purchase a liability policy with a higher limit, so you avoid any out-of-pocket liability. 

Collision coverage

Collision coverage repairs your vehicle if you hit another car or an object. This coverage applies when you were at fault for the crash, and it can help significantly if you do not have cash on hand to repair a car or pay off a car loan if your vehicle is totaled. 

Comprehensive coverage

This coverage applies to damage caused by other reasons than accidents. This includes theft, damage from a natural disaster, and more. 

Uninsured Motorist/Underinsured Motorist (UM/UIM) Coverage

If someone else hits you and does not have the required car insurance, your UM coverage can kick in. If someone has the minimum insurance and your losses exceed their policy limits, your UIM coverage can cover the remaining losses. 

Personal Injury Protection (PIP)

Some states are no-fault car insurance states, so you must have PIP coverage to cover your injuries from crashes, regardless of who was at fault. Your insurance agent will know whether you need to have this coverage. 

Learn More About Your Car insurance Options

If you have questions about car insurance needs, speak with Northridge, CA Panorama Insurance Agency about your options. Contact us today! and let us help you as many customers in Northridge, CA nearby, and surrounding areas.