Auto insurance is usually required by the law for most drivers. However, there are many different coverage options to consider, and many are great for new vehicles. If you would like to know more, check out these four types of auto insurance options to consider for your new vehicle.
1. Liability Insurance
In most states, you are required to purchase and maintain liability auto insurance to legally drive on public roads. Liability insurance is incredibly affordable because it only covers damage and injuries to the other diver in the event you cause a collision.
You can often find ways to lower your liability insurance premiums. Taking a safe driving course may lower your risk in the eyes of the insurance carrier. Similarly, maintaining a good and clean driving record can help reduce premiums.
2. Collision Coverage
If you want to protect your vehicle in the event of an accident, consider collision coverage. Even if you caused the accident, collision coverage pays for the repairs and/or replacement if the car is totaled. It does not cover medical bills, but this is a great way to ensure you don't end up with a car that's been totaled and no funds to replace it.
Similarly, collision coverage can help protect your car loan. If the car is totaled, you'll still have to repay the debt.
3. Comprehensive Coverage
Accidents aren't the only threat to your vehicle. Natural disasters like fires and storms are not covered under collision insurance. Instead, consider comprehensive coverage. Most plans also provide coverage for theft and vandalism. Depending on the auto loan provider, you may be required to purchase comprehensive and/or collision coverage.
4. Gap Insurance
New cars depreciate fast. For this reason, your car may be worth significantly less than you owe. If the car is beyond repair, even if you have full coverage, you may not get enough money to repay the old loan. In turn, you may not be able to afford the new car you want and have to settle for a used car or a different model.
Gap insurance allows you to easily put aside extra money to close the gap between the car's value and the loan amount. If you never use gap insurance, you get the money back when you sell or trade in the car.
If you are getting a brand-new vehicle, consider more than just liability insurance. A robust policy will better protect your finances in the event of a car accident or car damage. If you would like to know more, contact a car insurance provider today.