Discovering what type of car insurance is best for you can be overwhelming with the amount of coverage options, insurance lingo, and different price points. Heaton Bennett Insurance is here to make the task easier for Austin, TX drivers! Take a look at a breakdown at the most common types of car insurance below and what they can do for you as a driver below.
Every state in the U.S. has a set minimum car insurance requirement. Liability insurance usually equals that specific requirement, and is a must-have for auto insurance no matter what vehicle you drive. Liability insurance covers 3rd-party costs – like medical or auto-repair costs that other people might have due to an accident. However, liability insurance does not cover you or your vehicle, so if you’re looking for a higher amount of coverage, full or comprehensive coverage is a better option.
Full coverage insurance protects you & your vehicle against a wider range of risks and usually consists of Collision & Comprehensive insurance. Collision insurance covers damages to your vehicle that occur when driving, like when in a fender bender. No matter who is at fault in an accident, collision coverage pays to repair or replace your vehicle. If you only have liability insurance, it would only cover damage to your car if the other drive is at fault and they enough liability themselves to cover the damage. This reason alone is why a huge percent of drivers decide to purchase collision coverage.
Comprehensive covers damages to your vehicle outside of driving situations, like weather damage or theft. Comprehensive coverage tends to be less expensive like liability insurance, so it’s a good idea to always have no matter what kind of car you drive.
About 1 in 8 drivers are uninsured according to the Insurance Research Council. Uninsured coverage will cover medical expenses for you & passengers that result from a driver that is uninsured or a hit-and-run driver. However, it does not cover damage done to your vehicle.
If a driver hits you that has insurance, but it’s not enough – that’s where underinsured coverage can help you. Underinsured insurance coverage covers you when you’re involved in an accident caused by a driver whose insurance falls below the state’s required minimums.
What is GAP insurance? GAP stands for Guaranteed Auto Protection, and its popularity has risen considerably over the last few years. GAP insurance’s purpose is to protect a new vehicle purchase. Let’s say you just purchased a new car and financed it. You’re driving it off the lot and boom! You get into an accident. Collision & comprehensive coverage will only cover the market value of your vehicle, so you could be responsible for up to 25% of your new vehicle’s value that was lost the moment you left the car lot. Depending on the vehicle you purchased, this can be a huge financial hit.
GAP insurance would fill in the gap not covered by your regular insurance policy, covering the value of your new vehicle and the remainder of what is still owed.
Choosing A Deductible
A insurance deductible is the portion of the damages you are responsible for paying before your coverage kicks in. For example, if you find yourself in a fender bender and the repairs cost $3,500. If you have a deductible of $500, all you would need to pay is $500, while your insurance would cover the rest.
In general, you can choose a low or high deductible for your insurance policy. Although a low deductible is appealing, it’s important to remember that some insurance companies will consider you a higher risk, which can result in a higher premium. A higher deductible is considered less risky, and you could end up with a better premium as a result. The downside to a high deductible is having low-cost repairs. If your deductible is $1,000 and the repairs only cost $700 – you’ll have to pay that out of pocket, as insurance wouldn’t kick in unless the cost is over $1,000.
Now that you’ve learned the breakdown of car insurance, it’s time to find the perfect company and policy for your needs & budget. Contact the experts at Heaton Bennett Insurance in Austin, TX today and our team will work diligently to find the best options for you, or easily get a free auto insurance quote online in minutes!
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