Auto insurance

3 Types of Optional Auto Insurance Probably Worth Buying

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Drivers should consider obtaining this coverage even though it is not mandatory.


Key points

  • Most states require drivers to carry liability insurance to protect accident victims.
  • There are other types of car insurance that drivers are not required to have.
  • Motorists should seriously consider purchasing several types of optional coverages, including comprehensive and uninsured coverages for motorists.

In most states, motorists are required to carry liability insurance. This type of auto insurance provides protection in case the policyholder causes an accident and injures others or damages other people’s property.

In addition to liability insurance, there are many other types of coverage drivers can purchase when purchasing auto insurance. Although these other types of auto insurance may be optional, motorists should seriously consider setting up all three types of auto insurance.

1. Collision coverage

Collision coverage is not required by state law, but lenders may require it, so some motorists may have no choice but to purchase it if they borrowed for their car. .

Even for drivers who have the option of opting in or opting out of collision coverage, it’s often worth buying. This is because it is the type of car insurance that would pay to repair or replace the policyholder’s own vehicle in the event of a car accident.

Without collision coverage, if the policyholder were involved in an accident that was not caused by another motorist and therefore covered by the other driver’s liability policy, that policyholder would have no chance of getting an insurance check. Paying for expensive repairs out of pocket or buying a new car without the help of an insurance company could be financially devastating. Collision insurance ensures that this does not happen.

2. Full coverage

Like collision insurance, comprehensive insurance is not required by state law, but it is often required by car loan providers. But then again, even motorists not mandated to buy it should seriously consider doing so.

Comprehensive coverage covers all damage to a vehicle that is not caused by an automobile accident. This can range from vandalism to theft to a tree falling on the vehicle and crushing it.

Without comprehensive coverage, any source of loss not related to an accident would not be covered. This could again require the insured to personally pay for the repair or replacement of a vehicle, which could cost tens of thousands of dollars.

3. Coverage for uninsured or underinsured motorists

Finally, while a small number of states require coverage for uninsured or underinsured motorists, most do not. And this type of protection could be particularly important because it can cover a wide variety of losses that occur after a crash.

You see, when another driver causes a car accident, that motorist’s insurance is usually required to pay for medical expenses, lost wages, and property damage. But the problem is that sometimes drivers don’t buy the liability insurance they need to pay for the losses they cause. Accident victims who crash with a driver who doesn’t have enough insurance — or none at all — might end up not being able to get the other driver’s insurer to pay.

In these circumstances, accident victims could only turn to their own insurer for financial assistance if they have uninsured or underinsured motorist coverage. If they have this protection, they can recover the damages that the other driver’s insurance would have had to pay in cases where the faulty motorist’s coverage is not sufficient.

Each of these types of insurance can save motorists from catastrophic financial damage, so it’s worth considering buying them.