Car insurance requirements vary from state to state, but there are absolute musts that cut across many states. For example, many states require car owners or drivers to have a minimum coverage for any injury or property damage they cause. These are mandatory auto insurance coverage that you must buy. However, some auto insurance coverages are optional. These policies are an additional expense but may save you from trouble in certain situations. We discuss some of the additional auto insurance options worth considering.
Mandatory Auto Insurance
Basic car insurance is essential for financial protection if you or someone using your car causes an accident that injures someone or damages their car or property. This is why some types of coverage are mandatory. Nearly all states require car owners to have these two car insurance types:
- Personal injury protection: Also called bodily injury liability coverage, PIP covers costs associated with injuries you or someone driving your car causes.
- Property damage liability: This coverage reimburses other people for damage you or someone driving your car causes. The damage can be on another car or property.
These two policies — bodily injury and property damage liability — are broadly known as liability coverage. Under car insurance terms, liability means you are financially and legally responsible for the damage and injuries you cause to other people, cars or properties.
As a no-fault state, Pennsylvania also requires drivers to have medical coverage for you and everyone on your policy in case of an accident, regardless of who was at fault. This coverage differs from liability coverage, which covers damage and injuries to other people when you’re at fault. Medical benefits coverage pays medical bills if you or others covered by your policy are injured. In Pennsylvania, the minimum limit for this coverage is $5,000. You can take higher limits for the best protection.
Optional Auto Insurance
You can purchase additional auto insurance coverages in addition to what the state requires. Taking optional auto insurance means you get more coverage for your car and yourself. Besides the medical benefits coverage, mandatory liability coverage mainly protects other people’s injuries and property. Optional coverage is mainly for taking care of yourself and your vehicle.
Here are some common types of optional insurance to consider:
Comprehensive Coverage
Comprehensive auto insurance covers any type of loss or harm that did not result from an accident. Examples include:
- If your car is stolen
- If your car is vandalized
- Damage from hitting animals
- Damage from hazards like fire
- Damage to your car caused by natural disasters like severe weather
Most banks or lenders require you to have comprehensive coverage to receive a car loan.
You may consider adding this coverage if you aren’t sure whether you can pay out of pocket if your car is stolen or severely damaged by natural disasters. Compare your car’s value and the insurance premiums to decide if this coverage is worth it. A car of low value might be worth less than the cost of insurance.
Collision Insurance
This coverage pays for repairs to your car after an accident. However, it does not cover mechanical breakdown and regular wear and tear of your car or damage you cause to other vehicles.
Like comprehensive coverage, most lenders and banks require collision coverage before you can receive a car loan. Pennsylvania laws require insurance companies to apply a $500 deductible unless you request a lower amount. The higher the deductible, the lower the premiums. As your car gets older or the value depreciates, you may consider dropping this optional coverage.
Underinsured and Uninsured Motorist Coverage
Underinsured and uninsured motorist insurance covers injuries you, your passengers and anyone covered by your policy receive if you are hit by an at-fault motorist who doesn’t have insurance or doesn’t have adequate insurance to cover your claim. This policy also covers damage to your vehicle and related property.
Although auto insurance is mandatory in nearly all states, not every car owner or driver buys these policies. An estimated 14% of drivers were uninsured in 2022. Underinsured and uninsured coverage helps cover costs if you’re in an accident and the other driver has insufficient insurance or doesn’t have insurance.
Extraordinary Medical Benefits
Medical benefits insurance coverage is mandatory in Pennsylvania. However, medical bills may be higher than expected and require additional coverage. This is why you may consider this optional policy. Extraordinary medical benefits coverage pays for medical and rehabilitation bills that exceed $100,000. The coverage has a maximum limit of $1.1 million.
Additional Auto Insurance Options
Other optional auto insurance options worth considering include:
- Lease/loan gap insurance
- Funeral benefit
- Rental reimbursement coverage
- Income loss
- Towing coverage
Choosing the Right Coverage
To determine what auto insurance you need, start with your state’s mandatory coverage. Pennsylvania has three mandatory requirements — medical benefits, bodily injury and property damage liability.
Under Pennsylvania laws, you could face the following expenses and penalties if you drive your vehicle without insurance:
- Minimum fine of $300
- Vehicle impoundment
- Three-month suspension of your driving licence
- Three-month suspension of your vehicle registration
- Restoration fees for restoring your driving licence
- Restoration fees for restoring your vehicle registration
Once you understand what insurance options are required for auto insurance in your state, you can choose optional auto insurance.
Comprehensive auto coverage generally makes sense because it covers a wide range of events, including unforeseen events such as natural disasters. However, paying for both comprehensive and collision coverage might not make sense if you drive an older car with little or no resale value.
Insurance companies base premiums on several factors, including your insurance score. This rating represents the probability of a person filing an insurance claim while under coverage. Your insurance score also considers your credit rating. Other factors that determine your premiums include:
- The type and age of your vehicle
- Vehicle safety features
- Average miles driven in a year
- Where the vehicle is regularly parked
- Driving history of the driver
- Limits and coverages chosen for the policy
Optional auto insurance coverage allows you to widen your protection and that of your family and passengers in case of an accident.
Get Your Coverage With Strock Insurance
You may feel that Pennsylvania’s three mandatory auto insurance policies do not protect you enough. If your car gets stolen or you get in an accident with an underinsured or uninsured driver, these optional policies save the day. At Strock Insurance, we have been providing competitive insurance coverage since 1983. Get in touch with us today to learn about your auto insurance options in Pennsylvania.