Buying a new car is a big expense. You will have both a down payment and the continued financing to manage. Plus, your brand-new vehicle us something you want to protect so that you can continue to use it for all of your needs for years to come.
Still, you never know when you might have a car accident, whether a tree might fall on your car in a storm, or if someone will vandalize or try to steal your new vehicle. In any case, you might face expensive repair costs or the total loss of your car. This could be a huge loss, not just because you’ve lost a car that you love, but also because of the big monetary loss you might face. Even small damage could cause your car to experience a drop in value, and that’s something no one wants to face.
Luckily, if you have car insurance, you’ll be able to have help with the costs of recovering from these losses. However, you must ensure that you have the appropriate benefits in place from the start. Let’s take a look at some of the essential benefits that new vehicle owners need in their car insurance.
1. Liability Insurance
Most states require all of their registered drivers to carry auto insurance. The most common required benefit is liability insurance. It is coverage that will compensate others who sustained injuries or property damage after an accident is your fault. For example, if you rear-end another car at a stoplight, then the accident is your fault, and your liability coverage can compensate the other affected driver.
Most states have laws that assign guilt for the accident, and the person who is at fault will be the one who has to pay for both their own damage and the damage of others. Liability insurance is the coverage that will enable you to compensate the other driver.
2. Collision Coverage
Liability insurance will not compensate you for your own property damage following a wreck. It will only cover the other driver for their vehicle damage. To get your own coverage, you will need collision insurance. It will compensate you for the damage to your own vehicle following a wreck.
If the car sustains repairable damage, then your policy will pay you for the damage of the car minus the cost of your deductible. Your deductible is an amount of money that you agree to pay towards the repairs yourself. Damage that is less than your deductible cost will not have coverage.
If you total the car, most collision coverage will settle with you based on your car’s actual cash value at the time of the accident. This is the used value of the car at the time of the wreck, not the value of a new car.
3. Comprehensive Coverage
There are more hazards than just wrecks that could damage your vehicle. These might include:
- Falling objects
- Animal strikes
Under these circumstances, your vehicle damage might prove as severe as in any accident, and you can use comprehensive auto insurance to pay for the necessary repairs. Coverage will compensate you much in the same way as collision insurance. However, comprehensive coverage does not include collision benefits. Therefore, you’ll need both types of coverage to get full benefits.
4. Gap Insurance
If you have a policy with cash value collision and comprehensive coverage, then the settlement you receive for a totaled car might be lower than the value you still owe on your vehicle’s loan. Still, just because you lost the vehicle, that doesn’t mean you are free from your note. As a result, you might need assistance paying off the value of your loan. It is gap insurance that will ensure you receive this additional compensation to cover the debt.
5. Uninsured/Underinsured Motorist Coverage
If a wreck is not your fault, then it is expected that the at-fault party’s liability insurance will pay for your vehicle’s damage. However, you might run into a scenario where the at-fault driver does not have liability insurance. Or, even if they do have coverage, their benefits might not pay for the full amount of your new vehicle’s repair costs.
In these cases, your own auto plan might provide uninsured/underinsured motorist coverage, which you can use to pay for your property damage. Uninsured motorist coverage will pay for your losses when the other driver has no liability insurance at all. Underinsured coverage can step in following a scenario where someone else’s liability coverage has already paid up to its limits.
Always check with your insurer when putting together your auto policy on your new car. In many cases, they will require you to obtain collision, comprehensive and gap insurance, in addition to other benefits. With the help of our agents, you can ensure that your new benefits will guarantee that your new car will have protection throughout its life with you.
Also Read: Does Car Insurance Cover Vandalism?
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