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How Insurance Will Protect You in an Accident

Lindsey Patterson
Turn on the TV or radio these days, and you're almost guaranteed to hear an advertisement for car insurance. But when it comes to buying or choosing the right insurance, what do you really need? Here are a few things to keep in mind when insurance shopping.


There are two types of physical damage coverage available with car insurance policies; collision coverage and comprehensive coverage. Collision and comprehensive coverage are similar in that they both cover the loss related to your vehicle. Collision insurance covers damage caused by accidents with other vehicles and stationary objects.

Actual Cash Value

Your vehicle’s actual cash value is not how much you paid for. Instead, the actual cash value is the vehicle’s current value, considering factors like its age, mileage and condition. With this coverage, you will be asked to select a deductible. The deductible is the amount you'll be responsible for paying for each covered loss.

Damage Coverage

The second type of damage car insurance for your vehicle is comprehensive. This covers damages your vehicle incurs from non-accident events like weather, wind, as well as theft and vandalism.

Personal Coverage

You should consider your rental reimbursement and gap insurance. Rental reimbursement pays for a rental vehicle. If your car is not driveable as a result of a covered or insured loss, it is optional and not required as part of your insurance policy. However, it can be beneficial if your car must be in the repair shop for several days.

Gap Insurance

If you do not have access to another vehicle when your vehicle is financed, you may want to consider gap insurance. It helps you from being upside down on your loan or owing the bank more than the actual cash value in the result of a total loss situation. Before you purchase this coverage from your insurance agents, be sure to check your loan’s agreement.


A deductible is the amount of money you must pay when making a claim on your policy before your insurance company begins paying costs. For example, suppose you have a policy with a $500 deductible and you have an accident that causes $3000 in damages to your vehicle. You are responsible for the 1st $500 of repairs and the insurance company pays the $2500.
The price of the deductible you choose makes a difference in the amount of your premium. A low deductible means a high premium. A high deductible means a low premium. If your budget allows for high out of pocket expenses, choosing a high deductible is worth for the lower premium. If high deductible is not in your budget, higher premiums may be best.

Uninsured Motorist Coverage

All of us on the road at some point have worried about the dangers of an uninsured or underinsured driver causing an accident. That's why uninsured motorist coverage can be a financial lifesaver.