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If you’re looking for car insurance, it can be easy to get confused about the level of coverage that you need. 

Everyone’s needs are different, but one thing that is true for all is that you need to protect yourself from financial problems if you ever have an accident. 

So, how much coverage do I need?

In this article, we’ll break car insurance down for you into simple terms and let you know the level of insurance coverage you really need. 

What Are the Common Types of Car Insurance?

There are many different types of car insurance. If it’s your first time buying insurance, don’t worry; you won’t need them all. Instead, you’ll need a selection, all of which will be bundled into one single policy. 

Each type of car insurance will cover you for something different. 

For example, if you crash into someone’s wall, you’ll not only have to think about damage to your vehicle, but you’ll also need to cover the cost of the damaged wall.

So, for this, you’ll need collision insurance for the car and property damage liability (PDL) for the wall. 

If an uninsured motorist causes a fender bender, then you’re covered by uninsured motorist cover. 

There are lots of other types of insurance. You can pick and choose these; as long as you have the minimum coverage for the state. 

Liability Insurance

Also known as ‘third-party insurance,’ liability insurance is the mandatory minimum level of cover needed in most states. 

Liability insurance covers any damage you cause to vehicles and properties as well as any injuries you’re responsible for. It does not cover damage to your property or vehicle. 

There are two types of liability insurance—bodily injury liability (BIL) and property damage liability (PDL). 

Collision Insurance

Where liability insurance covers the costs of damage or injury you cause, collision insurance covers your own vehicle. 

After an auto accident that was your fault, you’d be left with a large bill for your own vehicle repairs. That is unless you have collision insurance. 

Comprehensive Insurance 

Comprehensive insurance covers any other loss or damage to your vehicle outside of an accident situation. This includes theft, damage caused by severe weather, and vandalism. 

If you have a leased or a financed vehicle, comprehensive insurance may be mandatory.

Ideally, you should get this level of coverage as it protects you for every scenario and ensures you’re not out of pocket if you have an accident. 

How Much Coverage Do I Need?

If you find yourself asking “How much coverage do I need?” the simple answer should be that you should get as much as you can afford. 

Cars are expensive, and if you don’t have the right level of car insurance, you could be left seriously out of pocket in the event of a crash. 

Ideally, you should get a policy with a variety of coverages. This will protect you for damage to other vehicles, your own, other people’s property, and for theft. 

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