The Five Types Of Coverage You Need With A New Car
When it comes to car insurance, if you are driving a brand-new car, you will want to make sure you have all the necessary coverage. A new car is a significant investment, and you want to ensure your investment is protected with proper insurance.
Coverage Type #1: Collision Coverage
With a new vehicle, you are going to want to invest in collision coverage. Collision coverage is designed to cover damage your vehicle suffers from getting into a collision with virtually anything, from another car to a building to a mailbox.
With a new car whose value is high, it is worth it to carry collision coverage. As your vehicle ages and the value drops, you may want to drop collision coverage, but it is worth having this coverage when your vehicle's value is high.
Coverage Type #2: Comprehensive Coverage
Second, you are going to want to add comprehensive coverage, which is different than collision coverage. Comprehensive coverage will provide protection for damage done to your vehicle by events such as a natural disaster or theft.
It protects your vehicle against ways it could be damaged outside of a collision. Generally, with this type of insurance, the coverage limit is equal to your vehicle's fair market value.
Coverage Type #3: Gap Insurance
If you have a car loan out on your vehicle, you will want to get gap insurance. Gap insurance, if your car is totaled, will pay off the difference between your car's value and the amount you still own on your car loan.
For example, you could owe $15,000 on your car loan, but the insurance company could only value your car at $12,000, leaving a $3,000 gap that you would have to pay your loan provider. With gap insurance, your insurance provider will pay the remaining $3,000 off your car loan, so that you are not left paying for a car that is totaled.
Coverage Type #4: Uninsured Motorist Coverage
You can't guarantee that every driver on the road will carry car insurance or the right amount of car insurance. Uninsured motorist coverage will kick in if the other driver is at fault for an accident but doesn't have insurance.
Coverage Type #5: Rental Car Coverage
You may also want to add rental car coverage to your policy. If your vehicle is damaged and has to be repaired due to an accident, your insurance provider will cover the cost, up to a set amount per day, for a rental car.
When it comes to insurance on a new vehicle, in addition to the state's minimum requirements, you should consider carrying collision, comprehensive, gap, uninsured motorist coverage, and rental car coverage on your vehicle. This will fully protect your new vehicle and investment.
For more information about auto insurance, contact a local insurance company, like The Policy Center.