Stepping into a new car is an exciting moment, but it's important to make sure you have the appropriate insurance coverage before taking that new car onto the open road. In fact, most (if not all) dealerships will not let a car off of their lot without first verifying with an insurance company that your coverage meets their minimum requirements.
If you already have car insurance, it's important to call your insurance company when you buy a new car to ensure that you remain covered. Minimum insurance requirements vary on a state by state basis, and fall under the following general categories:
Bodily Injury Liability
Covers injuries or death caused by the policyholder to others.
Collision
Pays for damage to your car in the event of an accident. This includes collisions with other vehicles, street signs, telephone poles, etc.
Property Damage Liability
Pays for someone else's property damaged, if caused by the policyholder.
Medical Coverage/ Personal Injury Protection
Payment of medical expenses for the policyholder and any passengers of the policyholder's vehicle.
Comprehensive
Covers damages and/or loss not caused by a collision: theft, fire, vandalism, and other causes.
Uninsured or Underinsured Motorist Coverage
When the at-fault driver's insurance limit is too low to pay for the damage caused in a collision.
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