California requires its vehicles to be covered for liability insurance. The term refers to expenses you are liable to pay if you have caused an accident resulting in damages. However, it does not pay for damages to your own car. If you took a loan on your car, the bank will almost certainly require you to have full auto insurance instead of just liability coverage.
Then again, when you cause an accident, you are liable to pay for damages caused to public and private property. Property damage, as it is known in the trade, is a part of liability insurance. Simply put, if you don’t have it, you have to pay out of your own pocket for damages you caused resulting in an accident. Considering the average price of a car these days, this could well be a financial catastrophe. It is no wonder California requires its vehicle owners be covered for minimum property damage.
Personal injury protection is another coverage that pays for all or a percentage of medical and hospitalization expenses resulting from accident injury. It also provides assistance against wages lost as a result of the injury, and some additional death benefits.
The uninsured motorist insurance policy comes into effect when you are involved in an accident caused by an uninsured vehicle. This is important because there are still many drivers in California who flout legal compulsion and operate without minimum insurance coverage. It may seem like having to pay for someone else’s mistake, but it’s always better to be a little safe than sorry! Uninsured motorist coverage is not a legal minimum requirement in all states, but it is undoubtedly very practical to have.
Collision and comprehensive insurance coverage policies are additional policies that come under the full-coverage umbrella. Banks and financial institutions usually require you to have both if you want to take a loan on your new car. Comprehensive coverage insures your vehicle against theft, vandalism and a slew of natural disasters like floods and storms. Collision coverage insures you and your car when you are found to have caused an accident.
Understanding the various types of car insurance coverage will help you find the right policy that covers all your needs at a price you can afford. Most of all, it will let you to drive in peace.