Just as not all cars are created equal, not all car insurance policies are created equal. And, there are a few questions you should ask before buying a car insurance policy.

What Kind of Insurance Coverage Do I Need?

Car insurance exists to help a vehicle owner recover the costs of any damage to their car or injury resulting from a car accident. If only it was that simple. There are different types of coverage, not to mention different coverage amounts (see the next point down). You need to look carefully at your needs to decide what coverage is best for you and if selling you car may be a possible solution if you were ever involved in an accident.

What Kind of Insurance Coverage Do I Need?

GAP Coverage: Guaranteed Auto Protection or Guaranteed Asset Protection or GAP Insurance covers the difference between the value of a vehicle post-accident and balance still owed in financing, be it an auto loan or lease. Basically, if you’re making payments on a car and get into an accident, GAP Coverage will fill the gap between what the car is worth and what you owe.

Uninsured and Under insured Motorist Protection: UM and UIM protection are required in many states. UM and UIM cover the costs of repair to your car if the driver who hits you has no insurance or is under insured. There’s usually no deductible for this coverage, but there’s often a limit as to the amount you can receive.

Collision Coverage: Collision insurance covers repairs to your car no matter who’s at fault. Often paired with a deductible, Collision coverage is a good idea for newer vehicles or more valuable cars. If you don’t have Collision coverage and have to cover vehicle repairs out of your own pocket, seeking an alternative solution like selling your damaged car to DamagedCars.com may be a good option.

Comprehensive Coverage: Comprehensive coverage covers your car for any non-collision damage. Also good for cars with more value, Comprehensive coverage often carries a deductible. If you live in an area with high risk of vandalism, theft or storm damage (flooding, lightning, etc), Comprehensive coverage may be wise.

New Car Replacement: It’s a relatively new concept. If you buy a new car and it’s declared a total loss sometime in the first few years of ownership, you can get a replacement new car instead of a check for the depreciated value.

Personal Injury Protection: Not offered or required in all states, PIP is useful should you or your passengers get injured in an accident as it covers medical expenses and lost wages for you and your passengers.

Full Coverage: Full coverage is a commonly used term people use to describe the extent of their auto insurance coverage. Full Coverage doesn’t mean that you have every type of coverage offered. Full coverage can simply mean your policy has more than simply Liability coverage, like collision and comprehensive. How Much Insurance Coverage Do I Need?

If you lease a car, odds are the leasing company will dictate your minimum insurance coverage. But, if you own your car the amount of coverage you need is dependent on your car and your personal needs. Liability covers you for the expenses of the people you hit in an accident where you’re at fault. It won’t cover you, your passengers or your car. There are two different types: Bodily Injury Liability (BIL) and Property Damage Liability (PDL).

Bodily Injury Liability coverage pays the medical expenses of individuals you hit if you’re at fault for the crash. You’ll often see numbers like “100/300” or “50/100” related to BIL. This refers to the maximum amount that can be paid out Per Person/Per Accident. Most states have a minimum amount, but to be safe, you should choose an amount to cover your personal assets should the accident lead to a lawsuit. Property Damage Liability covers damage to the other car if you are at fault.

When it comes to choosing your deductible, this is almost entirely a function of how much you think you’ll be able to afford out of pocket to repair your car after an accident. The lower the deductible, the higher the premium. In terms of Personal Injury Protection, if you have health insurance and are covered for disability through your employer, you may not need more than the minimum PIP coverage. If you have insufficient health insurance and opt for PIP, try to carry at least the amount you have for your BIL.

Who Will My Insurance Policy Cover?

I have no answer to that question, but your insurance broker should. Ask questions like: If you loan your car to a friend, are they covered? If your child is learning to drive with a learner’s permit, are they covered? If you borrow a friend’s car or rent a car, are you covered?

What Discounts Am I Eligible For?

Every insurance company offers discounts. If you have multiple policies with the same company, have a perfect driving record, or even (believe it or not) are a good student, there may be discounts to be had.

What Risk Factors Increase My Insurance Premium?

Age, amount of time you’ve been driving, value and type of car, location where the car will be kept and driving record will increase or reduce your car insurance risk assessment.

Does My Insurance Policy Cover OEM or Aftermarket Parts?

This is a very important, often overlooked question. After an accident, when your car is in for repairs, what type of parts will your insurance pay for? The ideal parts are OEM, or Original Equipment Manufacturer. Those are parts identical to those originally installed on your car. Some policies cover aftermarket (or generic) parts. This isn’t necessarily bad, especially if you have an older car. But, if you have a luxury or high performance car, paying a bit more for OEM parts is probably a good idea.