Auto insurance is the elimination of the cost of risk if you and your vehicle becomes involved in an accident. Auto insurance covers you whether or not you are at fault; the goal of auto insurance is to cover the costs of accidents or calamity.
In Florida, you are required to carry minimum amounts of insurance for personal injury protection and liability. Everything beyond that is optional, but, if your vehicle is financed through a lender, you may be required by the lender to carry higher amounts of insurance.
In Florida unless you can prove you have auto insurance, you will have your driver’s license suspended until you can prove you have insurance.
Beyond the basic personal injury and liability insurance, there are several types of other insurance, including collision and comprehensive. There are also categories of insurance such as uninsured motorist, medical payments, and more.
Collision insurance pays for the repairs to damage on your car if the vehicle is involved in an accident. The insurance company pays the largest share of the cost, but you pay the deductible. Deductibles can range from zero to $1,000 or more. The higher the deductible – the amount you pay out of pocket if you are in an accident – the lower the premium because you are sharing the risk with the insurance company.
Comprehensive insurance pays for other areas of calamities that can happen to your car, such as the car being driven through deep water and becoming stuck in the water, or a tree falling on the car where it is parked. Just as with collision insurance, deductibles determine the rate because you are sharing the risk there, too.
Towing insurance kicks in for anytime your vehicle is disabled and you are unable to drive it. Rental car coverage pays for you to have a rental car if your car is damaged and has to be in a repair shop for one or more days.
If you are traveling and use a rental car at a destination far from home, the rental car company usually will try and pressure you to purchase their short-term insurance on their vehicle you are renting. In most instances, this is unnecessary, if you have good car insurance for your own vehicle, because the car insurance covers you as a driver, too, beyond whether or not you are driving your car or someone else’s car.