Car insurance protects you against having to cover another driver’s injuries or repair bills following an accident, up to your policy’s limit. In many states it’s required by law, while it can help meet lender requirements for loans.

Rates can differ significantly, so be sure to shop around. You could reduce your rates by increasing the deductible amount, driving an inexpensive vehicle or maintaining good credit history.

Comprehensive Coverage

Like collision coverage, comprehensive insurance covers your car in case it is damaged in ways other than traffic-related incidents such as vandalism and theft – it also applies if there’s vandalism and theft involved! When combined with liability coverage it forms what’s commonly referred to as full coverage or “full protection”, and most lenders require this form of policy coverage when you lease or finance a vehicle.

Comprehensive insurance is dependent upon several factors: car value, location (natural disasters are more prevalent in some regions) and your savings to cover repairs or replacement in an emergency. It’s especially wise to purchase comprehensive coverage if you live in an urban area where crime such as theft and vandalism tends to be higher; consider opting for higher deductibles to cut premium costs but make sure that if anything happens to your car that you can shoulder that expense responsibly.

Collision Coverage

Collision coverage covers the costs associated with repairs for your vehicle if it collides with another car or stationary object, but does not extend to covering damage sustained from another driver – these damages would instead fall under their liability policy (or mandatory property damage coverage in Massachusetts).

Your car’s actual cash value (its market value minus depreciation) and your deductible determine its limits; typically higher deductibles reduce premium costs.

Collision coverage is usually required as part of financing or leasing a vehicle, and should also be retained if you plan on keeping your car long term. But after several years it may no longer make financial sense. Speak to an ERIE agent about whether carrying collision and comprehensive coverage makes sense for you – they can help weigh the benefits against each coverage type to determine which option is right.

Uninsured Motorist Coverage

Unfortunately, an increasing number of drivers lack any car insurance or have insufficient coverage – an estimated one out of eight US drivers, as reported by the Insurance Research Council 2021 report, are uninsured.

Though many states require drivers to have auto insurance, not all do. If you get into an accident with someone who lacks sufficient coverage or doesn’t carry enough to cover your losses, you could find yourself financially liable for medical expenses, lost wages and property damages out of pocket.

Uninsured motorist coverage (UMPD) can protect you against this risk by adding it to your auto policy. It is typically an inexpensive add-on that provides two separate coverages: uninsured motorist bodily injury (UMBI) and property damage (UMPD).

Underinsured Motorist Coverage

Even though auto insurance is legally mandated in most states, many drivers fail to carry it. If you are hit by someone without any policy limits or one whose limits fall short of covering your damages, underinsured motorist coverage could provide essential relief.

When involved in an accident with a driver who does not carry sufficient liability coverage, medical and property damages are covered by this type of coverage. Most policies include an additional premium payment as part of their policy’s comprehensive package – similar to the deductible for collision coverage.

If an at-fault driver’s insurance limit exceeds your underinsured motorist coverage limit, their insurer should offer you a prorated amount to settle the claim and reimburse any remaining balance under this coverage. In addition, this coverage protects you if they were uninsured or found to be hit-and-run drivers.

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