How Do I Know If I Chose the Right Coverage?

When you are reviewing the different types of auto insurance coverage available, it can be a bit overwhelming. You want to make sure you are choosing the right coverage and amount that fits your needs and budget, while providing the best protection for your vehicle and investment. You want to make sure you are fully covered in case you get involved in an accident.

Whether you already have insurance or are in the process of shopping around for a new policy, it’s important to learn what to look for. Being an informed shopper will allow you to choose the right coverage for your situation.

To know if you have the right coverage you need to understand the three main kinds of coverage available: liability, comprehensive and collision. These three make up the main part of a policy and are sometimes considered a full coverage policy combined. However, you might need to add other coverage options to further build out the right coverage for you.

  •  Liability: If you are at fault in an accident, the insurance company will cover the damages you caused to another party and their property.
  •  Comprehensive: Covers damages caused by an event other than a collision, such as natural disasters, vandalism, floods, fires and theft.
  •  Collision: If you are involved in an accident due to a collision, this coverage will cover the repairs to your vehicle.

Being familiar with those three types is key to determine if you have the right coverage. However, it’s also a good idea to review other factors such as your lifestyle, driving habits and vehicle to know much coverage you need. Do you drive long distance and are dependent on your car daily? If so, you might want to make sure you have more protection. But if you drive short distances and less frequently, you might not need as much.

Following are additional questions to ask yourself to know if you have the right coverage:

  •  How much can I afford to pay out-of-pocket if I get into an accident?
  • What type of car do I drive?
  • Do I make payments on my car?
  • How much time do I spend in my car?
  • Do I lend out my car?
  • Is my daily drive hazardous?
  • Do I live or work in a dangerous area?

Now that you are better informed, you can review your policy to see if you have the right coverage to match your lifestyle. It’s important to know how your policy works and how it can work for you.