Do I need auto insurance for a used car?

Whether you're driving a new car, a certified pre-owned vehicle, or an older used car, you'll need to purchase an auto insurance policy before you take to the road. However, the specific kind of insurance, as well as the coverage amounts, can vary depending on your needs, comfort zones, and the value of your vehicle.

A good way to start is by determining the minimum amount of coverage you are required to carry by law. (This information can typically be found by logging on to your state's website and finding the link for the Department of Motor Vehicles.) Once you know what is required, the next step is to determine the amount of coverage that's right for you.

Here's a quick explanation of the types of car insurance coverage available:

* Liability coverage - If you're at fault in an accident that's covered by your policy, and other people (or property) are injured or damaged, liability coverage helps protect you from the cost of these damages.

* Medical payments coverage - If you're in a covered accident, this coverage helps pay for any reasonable and necessary medical bills.

* Underinsured/uninsured motorist coverage - If a driver with little or no insurance damages your car, or injures you or someone riding with you, this coverage option can help cover repairs and expenses. (This is subject to certain limitations, however, so check your individual policy, or talk to your agent for more details.)

* Collision coverage - This option helps protect you from repair costs to your car if you're involved in a covered accident, considering it's a covered loss (that's insurance-speak for an accident that's specifically covered by your policy). Collision helps pay for the repairs needed to get your car back on the road.

* Comprehensive coverage - This option helps protect your car in covered situations that don't necessarily involve other drivers or vehicles. If your car is damaged by a storm, vandalism, or passive object (such as a tree or a post in a parking garage) which fell and was not caused by collision, comprehensive can help keep you covered.

* Personal injury protection (PIP) - Helps reimburse you for lost income, child care expenses, medical expenses and other similar things if you're hurt in a covered accident. (Personal Injury protection is not available in some states, and the amount of reimbursement is based on the coverage you purchase.)

* Additional coverage options - Towing, labor-cost, rental car reimbursement coverage, sound system coverage, or Tape/CD coverage.

Want to find out how much each type of coverage costs before making a decision? Many insurance companies offer free car insurance quotes online.

Courtesy of ARAcontent