If you are looking for a car insurance policy, you first need to understand the different types of car insurance. The various types of car insurance policies provide varying degrees of protection to drivers and their vehicles. Moreover, the policy changes if you want to cover passengers in your car policy.
Car insurance policy also changes depending on the state in which you live. Although the policy and amount vary by state, you will need insurance wherever you live. Let’s discuss and understand different types of car insurance so that you can choose the right insurance.
Liability Coverage
This coverage is mandatory in most states, so it is important to know what liability coverage your state requires. You must purchase at least the minimum amount of coverage per state law.
The two types of liability coverage are:
Bodily Injury Liability – This covers the cost of another person’s injury if you caused the accident. Your passenger is covered under this coverage, but it won’t cover you.
Property Damage Liability – This covers the damage to cars or property of another person. Again, this does not cover your own vehicle or property damage.
Uninsured and Underinsured Motorist Coverage
Uninsured motorist coverage helps you pay your medical bills and, in some states, repair your car if you are hit by a driver who doesn’t have insurance. This coverage helps when the driver who hit you is underinsured and their liability limits are insufficient to cover your medical bills. This coverage is not mandatory in all states, but it’s a good idea to add it for extra protection.
Comprehensive Coverage
Comprehensive coverage covers damages to your car caused by natural calamities, vandalism, theft, or animal attacks—basically, things out of the driver’s control. If your car gets damaged for any of these reasons, compressive coverage helps repair or replace it.
This coverage has a deductible, meaning you need to pay out of pocket before your insurance gets activated. Your monthly premium will be based on how much of your upfront deductible you pay. This coverage is mostly optional.
Collision Coverage
Collision coverage helps to repair or replace your car damage if you are involved in a traffic accident with another vehicle or hit any static object, such as a fence or tree. This coverage covers pay up to your car’s cash value minus the deductibles.
Again, this coverage is optional. It’s a good idea to have collision coverage if your car is new or high-value. However, for old vehicles, this coverage may not be worth it.
Personal Injury Protection
PIP or personal injury protection is only available in some states. PIP helps you pay your medical bills for injuries that occurred in the accident. In addition, personal injury protection coverage also covers other expenses or losses incurred by injuries – such as child care or loss of income due to injury.
Medical Payments Insurance
Medical payments insurance covers you, your family, and other passengers under this coverage regardless of the fault. This pays for the medical costs associated with the payments, which include surgeries, X-rays, and more.
This insurance is similar to personal injury protection insurance. Still, the difference is that MedPay does not pay for expenses related to home care services or lost of wages due to accidents. This coverage is again required in some states and is optional in others.
Other Types of Auto Insurance Coverage
There are also many other types of insurance coverage available. You can add them to your policy depending on your needs. Below are some other options;
- Rental Reimbursement
- GAP (Guaranteed Auto Protection)
- Emergency Roadside Assistant
- Classic Car Insurance
Conclusion
Choosing car insurance is difficult, considering the different laws each state has. It’s better to get the help of the agent and discuss with him to close down options that are best for your needs. You can also get help from different online quoting systems to help yourself with estimation ideas. Hope this blog on different types of car insurance helps you to choose the best one for you.