Types of Car Insurance | Best Car Insurances

Types of Car Insurance

Just getting any car insurance policy that comes your way is not a good practice and usually not nearly enough. The purpose of car insurance coverage is to ensure that you are protected and/or adequately compensated in case of any accidents while on the road. Car insurance coverage may also extend to passengers in the vehicle with you, as well as other drivers and/or passengers you may be involved in any vehicular incidents with. snjauto blog

As you are probably aware of by now, car insurance quotes vary in coverage and pricing. Factors that car insurance companies consider when coming up with an insurance rate for a person include age, driving record, geographic location, vehicle model, and other variables. But the type of car insurance you are getting also matters, and affects not only the rate you will need to pay but also how much coverage you are getting.

Here are the common types of car insurance offered by insurers

Liability insurance. In the event that you are involved in a vehicular accident and the determination is that the accident was caused by you, liability insurance covers any expenses for property damages or medical bills and hospitalization. Under liability insurance, coverage is extended to bodily injury or property damage caused by you to other people.

For instance, if the accident is ruled as your fault, you will be responsible for paying for any medical bills or long-term nursing care that is needed by the other motorist in the accident. Without liability insurance, these costs will come out of your pocket. Keep in mind, however, that intentional damage caused to property or life will not be covered by your insurer. Know About How Much is Car Insurance and Get the Right Coverage

Collision coverage. In the event of an accident, this type of car insurance will cover the costs to repair your car, or to pay out the value of the car in case of a total loss. Newer cars, especially those with a lien or lease, require collision coverage. This ensures that anything that needs to be replaced or repaired after the accident will be paid by the insurer. On the other hand, if your car is older or does not have a high market value anymore, it may not be necessary to purchase collision coverage.

If you are purchasing collision coverage, you would also want to consider getting gap coverage. Gap insurance coverage will pay the cash difference between your loan amount and your vehicle’s cash value, and is especially useful in an accident where the vehicle is totaled.

Comprehensive coverage. Comprehensive coverage refers to insurance that extends to other events or incidents aside from vehicular accidents or collisions. For instance, damages caused by inclement weather, theft, or other circumstances are among those covered by comprehensive coverage. Usually, insurance providers offer comprehensive coverage along with collision coverage, although most do not require the comprehensive coverage. Vehicles that are being financed or leased require comprehensive coverage.

When you consider getting comprehensive coverage as part of your car insurance policy, be sure to read the terms and understand what instances are covered. For instance, rather than a general coverage for “natural disasters”, most insurers would specify which calamities would be covered, such as floods, hail, earthquake, etc. If you live in a flood-prone area, you would want to make sure that your coverage limits specifically insure versus flood damage.

Personal Injury Protection. Coverage under Personal Injury Protection is extended to medical and hospital bills of the driver and the passenger. With PIP, the costs are insured and taken care of by the provider regardless of whose fault the accident is. Among no-fault states, PIP coverage is the most commonly required for all motorists. PIP also covers lost income due to accident injury, as well as any funeral expenses. What is Car Insurance?, Car Insurance Rate, Car Insurance Quote

PIP coverage is not available in all states, and there are also restrictions on lawsuits that drivers with PIP coverage may file after an accident. Before adding this to your car insurance policy, be sure to ask the insurance agent about the state laws regarding PIP in your case. Because this is no-fault car insurance, however, it is generally something you would always want to have as part of your coverage, especially because expenses can quickly add up and overwhelm you after a major vehicular accident.

Very related to PIP coverage is medical payments coverage, which also pay for any medical bills, injuries, dental care, and other expenses for you and your passengers in the event of a car accident. Usually, medical payments coverage policies do not differ much from the PIP policies in no-fault states.

Uninsured/Underinsured Motorist Protection. Ideally, all drivers on the road would have sufficient insurance protection. However, the reality is that not everyone on the road has adequate insurance protection, and many also do not have any insurance at all despite the legal requirements. Also, there are many instances where the state-required liability insurance is not enough for any expenses incurred. This is where you will need Uninsured/Underinsured Motorist Protection. The Best Way To Check What Insurance Group Is My Car

With this coverage, your insurance provider will cover any costs you incur if the motorist at-fault has no insurance coverage, or their insured amount is less than the costs you incur. This policy is for both you and your passengers, and includes medical expenses, pain, and lost wages, among others. The insured amount varies per provider, so be sure you know how much will be part of your policy.

Generally, adding uninsured/underinsured motorist protection to your car insurance policy is affordable, and is an excellent thing to always have in your car insurance package, especially considering how so many drivers on the road today have inadequate or no car insurance coverage at all.