When purchasing an auto insurance policy many people simply search for a quote with the lowest possible monthly payment. The problem with this approach is that securing the lowest monthly payment amount can often mean securing the least amount of coverage too. This can leave you without the coverage you really need if an accident occurs. This is why it is so important to determine exactly what type of coverage you require before purchasing an insurance policy. For many people, this means answering the question of whether basic liability insurance is enough or if they require collision coverage as well. Taking the time to answer the questions below can help you to make this determination for yourself. 

Do You Have A Lien Against Your Vehicle?

If there is a lien against the title of your vehicle, you will be required to pay this lien even if you no longer have the vehicle. For instance, if you took out a car loan in order to purchase your vehicle, you will be required to pay off any balance on this loan even if the vehicle is totaled as the result of an accident. While these costs will be covered by the other driver's liability insurance if they are found to be at fault for the accident, your own liability insurance coverage will not provide any coverage if you are found to be at fault. 

To ensure that you are able to pay off the lien on your vehicle in the event of an accident, it is important to purchase collision and comprehensive auto insurance coverage even if the financing company that holds a lien on your vehicle does not directly require you to purchase this type of policy.

Can You Afford The Cost Of Replacing Or Repairing Your Vehicle?

If you are found to be at fault for an accident that leaves your vehicle damaged, you will be responsible for repairing or replacing your vehicle. If you do not have enough savings on hand to cover this type of out-of-pocket expense, choosing to purchase an auto insurance policy that includes collision coverage may be a more effective way of managing your financial risk while ensuring you do not find yourself without a vehicle in the event of an accident.

Is Your Vehicle Routinely In A High Crime Area?

Comprehensive and collision policies not only cover the cost of damages caused by an accident but will also provide coverage for things such as vandalism, theft, and damage to your auto glass. If you work or live in a high crime area, purchasing an auto insurance policy can help you to manage the increased risk that your vehicle may be damaged and ultimately keep your out-of-pocket expenses to a minimum. 

You can find more information about auto insurance by visiting the websites of agencies in your area.