A few decades ago, the average age for an American to buy their first car was between 16 and 18 years. However, this trend has shifted as young adults now prioritize other aspects of life first, such as higher education, travel, establishing a career, and managing a higher cost of living. As a result, many people are delaying car ownership, which can be a positive change, as it often leads to greater financial stability when they do finally purchase a vehicle. Socially, this is a better way to do things; however, while statistics show that most individuals today acquire their first car in their mid-20s, many still lack the necessary understanding of the responsibilities that come with car ownership, particularly when it comes to broad coverage auto insurance.
Honestly, no one can be blamed as components of personal finance topics like insurance are not covered till one takes up related majors. Auto insurance is a critical component of owning a vehicle, but it can be complex and confusing. Coverage options, deductibles, and legal requirements vary by state, which can be overwhelming for young drivers—especially those who cannot understand the terminology and may not have the experience needed to navigate these complexities and select the right coverage for their needs. For a better understanding here is a guide to the top 3 coverages that are sold in the country:
Liability Coverage
This is basic coverage that is mandated by law, which everyone who owns a car must possess as it is required by every state. In case of an accident, you are protected from the financial burden that arises from the consequences. This coverage has two parts: bodily injury liability and property damage liability. Bodily injury liability pays for medical bills, lost wages, and pain and suffering for the other person injured in the accident. Property damage liability covers the repair or replacement of someone else’s vehicle or property that you damaged.
Comprehensive Coverage
Accidents can happen to even parked cars and this is where comprehensive coverage comes into the picture. Comprehensive coverage protects your car from damages not caused by a collision. This includes things like theft, vandalism, fire, or damage from natural disasters and hitting an animal. Like collision coverage, this type also requires a deductible. Having this coverage is crucial if you live in places with higher theft rates or severe weather, as it can save you from major financial losses.
Uninsured/Underinsured Motorist Coverage
Despite strict laws, there are still motorists who drive without insurance. In case you happen to be caught in an accident where the opposite party is not insured or not adequately insured, then leaving you high and dry will be an awful situation. Uninsured/underinsured motorist coverage is for accidents where the other driver doesn’t have any insurance or enough insurance to cover your damages. This coverage helps pay for your medical expenses, lost wages, and pain and suffering due to the accident.
Conclusion:
There are other types of coverage as well. Often insurance can be confusing till you are guided by an expert advisor who can simplify the matter for you. Get in touch with one so that you stay covered.
