Car Insurance: What You Should Know
If you own a vehicle, then you have already purchased car insurance. However, did you know what you were buying? Buying the right policy is important to be sure you are covered in all circumstances but also do not spend extra money when not needed.
Both Massachusetts and Rhode Island require car insurance if you own a vehicle. Each state has certain coverage that is required and other coverage that is optional. Liability coverage is the basic insurance coverage required by both states. Buying only liability coverage is the least expensive coverage you can buy but also has the least coverage. It will pay damages to anyone, other than yourself, including your passengers and a pedestrian for injuries they receive when you are at fault for an accident. It will not cover the cost of repairing your vehicle after an accident. For your car to be repaired, you must purchase Collision coverage. This coverage will pay for the cost of repairs to your vehicle less a deductible you choose. A deductible is what you will have to pay out of pocket for the repairs and then your insurance company pays the remainder.
You can also buy what is known as Comprehensive coverage. This type of coverage will pay you if your vehicle is stolen and is not recovered or recovered with damage. Remember if you have a loan on your car, the loan company receives the money first up to the balance that you owe and the rest will be paid to you.
In addition, you must decide how much coverage you want. Each state has different amounts of required coverage. Massachusetts requires a minimum of $20,000/$40,000 and Rhode Island requires a minimum of $25,000/$50,000. You can buy coverage for any amount you choose from the minimum up to umbrella coverage in the millions of dollars. What do these numbers mean? The first number is the maximum amount the insurance company will pay any one person for injuries in a single accident and the second number is the total amount the insurance company will pay others because of one accident that was your fault. Most important, if you are at fault for a car accident, keep in mind that if the damages of an injured person are above the amount of insurance coverage you purchase, the injured party can sue you personally for the amount of damages over the coverage paid.
Buying car insurance is simple but what coverage you buy can be confusing. Ask the insurance company or agent to explain what the coverage is you are buying and then decide what you need to cover you and your family in case of a car accident.
