Today it is a privilege for you to drive, but there is a price tag to having this privilege. Of course one of the things you are required to have by law if you are driving is general auto insurance. The insurance rate that you pay is the premium that you have to pay to a company that provides insurance for the coverage that you need. The insurance coverage helps to protect you from financial losses that can occur because of an accident, and without the coverage you would be responsible to pay for.

Of course general auto insurance is far more than just a way to insure your car to pay for repairs if an accident occurs. It is a way that you can keep yourself safe financially. It can help you to offset costs that come with lost wages if you are injured, bodily injury to others or yourself, lawsuits that happen after an accident, repairs to your vehicle, and benefits paid to survivors if someone is killed in an accident.

One type of general auto insurance that you can consider is liability insurance. It is important that you understand this type of coverage and all it involves. This type of coverage is made to keep yourself and any assets you have safe if you injure other people or cause damage to property when driving your vehicle and you are the one that is reliable. There is both bodily injury liability as well as property damage liability.

The bodily injury liability coverage will protect you if you are at fault in an accident when someone is killed or injured. Then there is property damage liability coverage. This will cover the cost of damage you do to someone’s property when driving your vehicle. This could include damage to the land, damage to a mailbox, a parked car, or even damage to a fence.

Another level of coverage you may have heard of when it comes to general auto insurance is collision coverage. You may have heard of comprehensive coverage as well. Many people get these two coverage options confused.

Comprehensive coverage will cover anything that happens to your car that is not caused by a vehicle accident. This can include coverage for when vandalism occurs, when a fire occurs, for hail damage, flood damage, or it can cover you if your car is stolen. Then there is collision coverage. This provides coverage when you do collide with another car or object and no matter who is at fault, with this coverage your vehicle will be covered.

When you go with collision and comprehensive coverage, usually the insurance company will not be paying for the entire loss. Most policies will come with a deductible that you have to pay. Once you pay the deductible, then payment from the insurance company will go into affect. If you do $1000 damage to your car and your deductible is $300, you’ll pay the first $300 and the general auto insurance company will take care of the rest.

Many people are wondering whether or not general auto insurance is going to be enough for their needs. They want to make sure they get insurance for a low cost. However, you need to consider whether or not the basic insurance is going to be enough for you if you have to make a claim. Here is a closer look at general auto insurance and what will be enough for your car insurance needs.

If you only purchase general auto insurance, meaning that you go with the minimum cover that the law requires you to have, then if you only have a small accident, it may be enough cover for you. Of course on the other hand, if you totally demolish your vehicle, then it may not be enough. There are some cases when having more than the minimum auto insurance can be important.

Why the Minimum May Not Be Enough

Although many people do end up purchasing the basic cover that they have to carry in their state, sometimes minimum cover may not be enough. If you have to have $10,000 in cover for property damage, what happens if you are in an accident and you cause $20,000 in damage to someone’s property?

This means that you’ll end up being the one liable for the $10,000 over the amount of cover that you have. This can turn into a nasty legal situation when you don’t have enough cover and you are in a bad accident that ends up exceeding the cover that you have.

When You Need More

Now that you can see why general auto insurance is not always enough, you also need to know about some specific times when you may need to have more than basic cover for your vehicle. If you don’t have enough cover and you cause damage to property or to someone else’s car or person that isn’t totally covered by your insurance company, then that person can sue you for the rest of the damages. In this case, if you happen to have assets, savings, or a home, then you can be in big trouble.

You could end up losing your savings, any stocks you have, or even your home if this occurs. This is why going with higher coverage can be so important if you happen to have any assets. You want to make sure that no one is able to touch your assets if you are in a vehicle accident.

Going through a vehicle accident is a scary situation. Finding out that basic general auto insurance wasn’t enough to cover the accident can make this bad situation even worse. Although it can cost you a bit more to go with higher coverage on your vehicle, it can definitely be worth avoiding all of these financial problems that can happen if you are under insured. So, don’t just think about the up front cost of your insurance plan. Think about the future and whether basic coverage is really going to be enough for you if something were to happen.

Do you know the laws in your state? Nearly all states require that drivers carry a minimum amount of auto liability insurance. That includes Utah. State minimum auto insurance liability coverage is generally quite low which, for most, means it is very affordable.

There is really no excuse not to have it, and why wouldn’t you? When you consider the degree of seriousness of many of the nation’s auto accidents, the costs of treating injured people from these events can be staggering. Even a short stay in a hospital without surgeries and advanced procedures can run into the tens of thousands of dollars. With the minimum amounts of liability coverage as low as ten thousand dollars, these amounts are hardly adequate.

Besides your home state requiring you to carry it, you need Utah auto insurance to make sure that if you cause an accident, you can afford to pay for the damage you caused. In addition to the basic liability coverage, you also may want to include Comprehensive (Comp) and Collision – coverage that ensures you can replace or repair your vehicle in the event it is damaged. Although states don’t require Comp & Collision, the bank that loaned you the money to buy that shiny new car probably will. With a new car and a whopping loan to go along with it, you won’t want to be out a vehicle when it is wrecked and still be responsible for making a payment on a worthless pile of scrap metal in the junk yard.

So the three main reasons to get Utah auto insurance are:

1. It’s the law in most states. Hefty fines, loss of your license and even jail time can result if you’re caught without auto insurance.

2. You will set yourself on a clear path to bankruptcy without coverage if your unintentional actions behind the wheel cause injury or death to another human being. Causing property damage with your vehicle could also land you in the poor house if you don’t carry Utah auto insurance.

3. You need to protect your hardware investment and the loan you acquired to make that investment. In other words, you’ll still be responsible for getting from point A to point B when you don’t have your car. And likewise, the bank will expect that you’ll continue to make the payments as well.

Utah auto insurance is a must-have. We should all consider ourselves lucky that most states require auto insurance coverage and that there are insurance companies around to absorb the risk.

Finance.Quandas.com. “Why do I need auto insurance?” QandAs: Finance. 5 Oct. 2009 [http://finance.qandas.com/insurance/why-do-i-need-auto-insurance.html].