Auto insurance is a complicated matter. Many people have an insurance policy but do not exactly understand how they are covered or what they will do if they find themselves in the position of needing to utilize their insurance. Discover the basic types of car insurance and find out how to obtain the coverage you need for your particular situation.
You may already know how auto insurance works, but do you know what the different types of car insurance are? If you’re shopping for auto coverage, knowing the different types of auto insurance and their coverages is an important step in getting the policy that’s right for you. Here are a few of the basic car insurance types, how they work and what they cover.
Nearly every state requires car owners to carry the following auto liability coverage, so it is important that you as the driver make certain you have an adequate amount.
Liability insurance protects you from any accidents that are your fault. If someone else needs medical attention or has property damage, your liability coverage will cover their damages. Liability coverage is required in most states. Liability coverage has three main aspects, and each has a different policy limit:
- The maximum coverage amount that any one person can receive in an accident.
- The total amount of coverage for all injured parties in an accident.
- The maximum amount of coverage for any property damage in an accident you cause.
Bodily Injury Liability — This covers costs associated with injuries and death that you or another driver causes while driving your car.
Property Damage Liability — This coverage will reimburse others for damage that you or another driver operating your car causes to another vehicle or other property, such as a fence, building or utility pole.
- Medical Payments or Personal Injury Protection (PIP) — Provides reimbursement for medical expenses for injuries to you or your passengers. It will also cover lost wages and other related expenses.
- Uninsured Motorist Coverage — Reimburses you when an accident is caused by an uninsured motorist—or in the case of a hit-and-run. You can also purchase under insured motorist coverage, which will cover costs when another driver lacks adequate coverage to pay the costs of a serious accident.
- Collision Coverage - This is the basic insurance type that covers your vehicle if you collide into something. This covers collisions with other cars as well as if you were to collide with another vehicle or object- e.g. run into a wall, barrier or tree. While collision coverage will not reimburse you for mechanical failure or normal wear-and-tear on your car, it will cover damage from potholes or from rolling your car
- Comprehensive Coverage - This covers anything that may happen to your car that is not directly related to a collision. This would include things such as theft, fire, hitting a deer or vandalism.
- Glass Coverage — Windshield damage is common, and some auto policies include no-deductible glass coverage, which also includes side windows, rear windows and glass sunroofs. Or you can buy supplemental glass coverage.
- Emergency Road Service/ Towing- Whether you have a flat tire, a jump start, or tow, Roadside Assistance can help quickly and easily
- Rental Reimbursement- Rental reimbursement coverage may be subject to a daily and per claim limit. Rental reimbursement coverage helps you pay for transportation expenses, such as a rental car or public transportation fare, while your own vehicle is being repaired after a covered insurance claim. It does not apply if your vehicle needs routine maintenance work or if you need to rent a car on vacation.
Now that you understand a bit more about the different types of auto insurance available, you are probably ready to find the right coverage for you. The best way to do this is to work with an independent agency that will allow you to compare insurance quotes online. By doing this, you can rest assured you are getting the best coverage at the best rate!