Is Your Car Insurance Plan Enough Protection?

Every car owner needs to sign up for an auto insurance policy. In the majority of states, it’s illegal to even drive your car without one. New Hampshire and Vermont are the only states where this type of insurance isn’t mandatory — although it’s still recommended for drivers to sign up for a policy so that they are not solely responsible for covering expenses. 

Your auto insurance is a basic, run-of-the-mill policy. Is this enough protection? 

Basic Auto Insurance

A basic auto insurance policy tends to have personal liability coverage for both bodily injury and property damage. Your policy might also include uninsured motorist insurance — this offers coverage for collisions when the at-fault driver is uninsured or, at the very least, has insufficient insurance. It can also offer coverage for expenses like medical bills when you’ve been a victim of a hit and run.

While this can give you financial protection in certain driving emergencies, your policy might not be enough. There are some gaps in it that you could fill with specific add-ons. What are they?

Collision Coverage:

Collision coverage will give you financial protection when it comes to car repairs and replacements after enduring a collision. The collision could be with a tree, a telephone pole or another car. You’ll also receive coverage for damages resulting from your car flipping over while driving or from hitting a pothole. 

Comprehensive Coverage:

Comprehensive coverage relates to damages caused by incidents outside of regular vehicular collisions. It can include situations like earthquakes, floods, fires, tornadoes and collisions with deer. It can also include incidents like automobile theft and vandalism.

Roadside Assistance:

Roadside assistance will give you coverage for services related to roadside emergencies. You can depend on this coverage when you need to call a towing service after your car breaks down in the middle of the highway and needs to be transported to a mechanic for repairs. 

These are some other circumstances when this coverage will come in handy:

  • You get locked out of your car 
  • Your car battery needs a boost
  • You get a flat tire and need a replacement
  • Your car runs out of gas before you reach a gas station
  • You get stuck in a snowbank in the middle of winter

Emergency Savings:

For additional financial protection, you should always have an emergency fund. An emergency fund is a collection of savings reserved for unplanned, urgent expenses that are outside the boundaries of your monthly budget. When one of these expenses crops up, you can withdraw the necessary savings from your emergency fund and respond to the problem immediately. 

If you have a car-related emergency that your auto insurance can’t cover — or at least can’t cover entirely — then you can turn to your emergency fund for help. It’s an effective backup plan to have when insurance isn’t enough. 

What if you don’t have enough emergency savings? In that case, you will need to turn to an alternative means to cover an urgent, unplanned expense. You could use your credit card to cover it, as long as you have plenty of available credit. You could also apply for a personal loan online and use the borrowed funds to pay for the expense.

Only look for personal loans that are available in your home state. So, if you live in St. Louis or Kansas City, you should look for Missouri personal loans to help with your emergency. Narrowing your search to Missouri will make sure all of your loan options are accessible to your location. 

Your basic plan might not be enough. Fill those policy gaps to give yourself more financial protection.