The Different Types of Auto insurance Coverage

The Different Types of Auto insurance Coverage | insurance-1st.blogspot.com
When you start to consider the various types of auto insurance coverage available it can get overwhelming. How do you know what types you need? Is it required by your state? Are there ways to save money and still have the right amount of coverage? Below we detail the different types of auto insurance coverages and provide a few scenarios where you would benefit from having a non-required coverage added to your policy along with some tips to save some money depending on your vehicle and budget.

Types of Auto Insurance Coverage Explained

There are some optional auto insurance coverages you may wish to consider. Your no-fault insurance does not pay for repairs to your car if it is damaged in an accident. If your car is properly parked and hit by another car, the other driver’s insurance will pay for your repairs. Except for this situation, the only kinds of automobile insurance that pay for repairs to your car are collision and comprehensive coverage.

Collision Insurance

This auto insurance coverage pays for repairs to your car when it is damaged in an automobile accident. Collision insurance is usually sold with a deductible. A deductible is the amount you agree to pay toward the cost of repairs before the insurance company steps in and pays the rest. The larger the deductible amount, the lower the cost of your collision insurance.

There are three basic kinds of collision insurance to choose from:

1. Broad Form collision pays for damages regardless of fault, with a deductible that appliesonly if you are substantially at fault.
2. Standard collision pays for damages regardless of fault, with a deductible that alwaysapplies.
3. Limited collision pays only if you are not substantially at fault, and may or may not havea deductible.

The Different Types of Auto insurance Coverage

Liability Insurance

Liability insurance covers you in the event you are in a covered car accident and it is determined the accident is a result of your actions. Liability insurance will cover the cost of repairing any property damaged by an accident as well as the medical bills from resulting injuries. Most states have a minimum requirement for the amount of liability insurance coverage that drivers must have. If you can afford it, however, it is usually a good idea to have liability insurance that is above your state's minimum liability coverage requirement, as it will provide extra protection in the event you are found at fault for an accident, as you are responsible for any claims that exceed your coverage's upper limit. You wouldn't want to run the risk of having to pay a large amount of money because your policy limit has been exceeded.

Comprehensive Insurance

This insurance coverage type pays for your car if it is stolen or for repairs if it is damaged by a falling object, fire, flood, vandalism, or collision with an animal.

Personal Injury Protection

While Comprehensive coverage may be something you don’t need to purchase, Personal Injury Protection (PIP) is something you should. The costs associated from an car accident can quickly add up, and in order to cover those costs Personal Injury Protection is available. With this auto insurance coverage, your medical bills along with those of your passengers will be paid, no matter who is at fault for an accident. Note: This coverage is not available in all states.

Uninsured and Underinsured Motorists Coverage

These coverages will pay if an uninsured or underinsured motorist seriously injures you or a member of your household. If you are awarded a settlement from the at-fault driver and they have insufficient or no liability coverage, your uninsured or underinsured coverage will apply. This vehicle insurance coverage will not pay for damage to your vehicle.