Whether your first car is a new model driven off the dealer lot, or a used one bought with money saved from your first job, owning a new car can be an exciting experience.
But owning a car also means taking the wheel when it comes to auto insurance coverage. When you drive your parents’ or family-owned car, you’re covered under their policy as a driver. When you become the registered owner of a vehicle, you need to purchase your own car insurance.
Car insurance not only protects you financially regarding auto damage and medical-related costs directly related to a collision, but also protects your other personal property from liability (and provides you a peace of mind). In most states, you are required to buy a minimum amount of coverage to drive legally.
Knowing a little about auto insurance can go a long way toward making sure you have sufficient coverage in place. Here are the different types of coverage a policy can include:
This pays for the repair of damage and the treatment of injuries other people may endure if you are at-fault for an accident. Hawaii’s minimum coverage limits are “20/40/10”. This means if you have the minimum coverage, your policy would pay up to $20,000 for injuries per person, up to $40,000 in total bodily injury claims for an accident and up to $10,000 for property damage.
Personal injury protection (PIP):
This would cover you and your passengers’ medical bills for accident-related injuries, no matter who caused the accident. Hawaii requires you to buy PIP. PIP can also pay for lost wages and the cost to replace services the injured person would normally have performed.
Uninsured & Underinsured motorist coverage:
This type of coverage would pay for your medical treatment if you are involved in an accident caused by another driver who doesn’t have insurance. Underinsured motorist coverage pays for your treatment if the driver doesn’t have enough liability coverage to pay all your medical bills. Some states require drivers to carry some form of uninsured and underinsured motorist coverage.
Collision and Other Than Collision Insurance:
These are optional for your policy. Collision coverage pays to repair your car if it’s damaged in an accident, or reimburses you for the market value of the car if it’s totaled.
For “Other than Collision Insurance,” this coverage is optional for when your car is stolen or damaged in ways that don’t involve a collision. Examples include: hail damage, glass breakage, fire, vandalism, damage from an animal, flood, earthquakes, falling objects and theft. Comprehensive insurance is limited to the value of your car at the time of the accident.
Other policy services:
Check whether your policy has roadside assistance and rental reimbursement coverage, which pays for a rental car if your vehicle ends up in the repair shop due to an accident claim.