The auto insurance industry is confusing sometimes, especially for the average driver. Still, it’s one of the most important pieces of financial protection you can own. Your policy can pay for a variety of damage you and your car might experience during travel. Take some time to learn about the limits you need on your policy, and how different types of coverage work.
How does car insurance function?
As a piece of heavy machinery, your car is durable. However, it’s not immune to damage. Vehicle wrecks, theft or other threats could strike at any time. So, whether you’re on the interstate or in your driveway, your car needs protection. It’s expensive, and you might worry about losing it. Being unable to use your car because of something you can’t control might cost you, in more than one way.
If you have car insurance, your policy can provide money to help you repair damage to your vehicle. It can also cover other costs like lawsuits or medical bills. Therefore, insurance provides consumer protection from which most of us can benefit.
Still, Limits Exist
Still, car insurance doesn’t free drivers from all financial responsibility. The goal, however, is to make these costs as low as possible.
Your policy will come with certain maximum limits in how much it will pay for certain losses. As a result, you’ll need to choose limits that reflect the full value of your vehicle and driving risks. Your insurance agent can help you hone in on the coverage you need. In the end, you’ll have a lot of different options from which to choose.
Whenever you hit the road, you might harm someone else. Liability coverage exists to pay for the damage you cause others, like a driver you hit in a wreck. 
Liability coverage is so important that most states require drivers to carry coverage. Georgia requires you to carry protection for injuries or property damage. The minimum limits are
- $25,000 bodily injury coverage per person
- $50,000 bodily injury coverage per accident
- $25,000 property damage coverage per accident
As a driver, you have to consider whether these limits are enough for you. Medical bills, car repairs and lawsuits might exceed the minimum coverage. Therefore, most drivers benefit from increasing their liability coverage. Consider increasing your liability coverage to create a more suitable financial cushion.
- Uninsured/Underinsured Coverage
In some cases, states require drivers to carry this insurance as well. It will often come with limits similar to your liability coverage. Think of Uninsured/underinsured coverage as liability insurance you can use for your own losses.
You might get into a hit and run. You might encounter an at-fault driver who doesn’t have enough (or any) liability coverage for your losses. This coverage can step in to help you pay for your losses when the other driver’s liability coverage cannot.
One benefit of using it is that you likely won’t experience a rate increase despite filing a claim on your policy. You didn’t cause the accident, so your insurers often won’t penalize you.
- Collision and Comprehensive Coverage
A tree might fall on the vehicle, or a collision with another car could lead to damage. As a result, you might need help paying for your losses. There are a couple of different types of protection.
- Collision insurance pays for damage resulting from wrecks
- Comprehensive coverage pays for non-accident damage, such as weather, fire or theft damage
The biggest loss you can face is a ruined, or totaled car. So, you’ll need coverage to provide compensation based on the full value of your vehicle. Replacement cost coverage will pay for you to get a new car of equal or lesser value if you total the car. Cash value coverage, on the other hand, will pay the depreciated value of the vehicle at the time of the accident. Which coverage works for you will depend on your own preferences and needs.
Keep in mind, most policies will come with deductibles. That’s a set cost you’ll have to pay for vehicle damage or other claims. For example, if you have a $1,000 claim and a $500 deductible, you’ll pay the first $500. Your policy will pay the remaining $500. Talk to your insurance agent about your current finances. They can help you choose deductibles and limits that are more appropriate.
Other Coverage
These aren’t the only coverage limits you can get on your car insurance. Providers might offer personal injury protection or medical payments coverage, to help you pay your medical bills. Others might extend rental car reimbursement, or offer covered towing services.
With the correct guidance, you can choose a policy that works best for you. Your insurance agent is there to see you have adequate coverage. Still, they can make sure you don’t get too much coverage, or pay an unfair price for your insurance. At the end of the day, they’ll make sure you walk away protected, but satisfied with coverage.