Here are the answers to two of the most commonly asked car insurance questions:

“When do I need to have full coverage insurance on my car?”

Anytime you take out a loan to purchase a car, they are going to require you to obtain full coverage on your car. Liability will not be sufficient.

Some people wonder why it is so important to have full coverage for an automobile loan. This is because throughout the duration of the loan the lender is the acting owner of your car. If you end up getting in an accident and you total your car, you will end up having to finish paying off this loan while you no longer have this vehicle (unless you have full coverage). Collision coverage would have paid off the rest of your loan.

Even the most experienced drivers get in car accidents. Even though it is tempting to get the least expensive option, you are better to be safe than sorry. There are so many things other than accidents that can happen to your car, such as vandalism and weather damage. It’s always nice to have full coverage when these things happen to you.

Just imagine if you end up getting physically hurt in an accident and you are underinsured. Then you will be making your car payments plus paying your medical expenses.

Getting a car loan is a huge step financially. Don’t do it unless you are ready for all it entails, including obtaining full coverage auto insurance.
Another commonly asked car insurance question is:

“What is the minimum auto insurance coverage that I need to carry?”

This depends upon the company you choose to purchase from. If you are looking for the most basic car insurance with the lowest premiums, you need someone who can offer you basic liability insurance.

Some states require you to carry at least the most basic car insurance, while other states just want you to provide proof that you could cover costs and damages in the event that you caused an accident. However, even though liability insurance will get you in the clear with state regulations, it won’t cover your medical bills if you suffer injuries in a car accident.

There is a good and bad side to getting the minimum car insurance coverage. It keeps you covered as far as your basic financial needs, but if you get into a car accident you may find out that you are totally underinsured, especially if you end up getting physically hurt or if your car suffers significant damages. The recommended coverage for physical injury is at least $100,000 per person and $300,000 per accident.

There are some states which have a law about no-fault auto coverage. What this says is that minimum auto insurance covers the medical expenses for the driver as well as the passengers of the insured car, regardless of who is at fault.

These are only two of the most commonly asked car insurance questions, and you can find the answers to many more like these online.

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Category: Finances
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