Are you an American citizen? If so, there’s a chance you’re a driver. According to the most recent figures, 232.8 million licensed drivers were in the US.
And regardless of whether you drive or not, you’re bound to be familiar with car insurance. Car insurance is a mandatory expense for those who want to drive.
In this article, our team takes you through the different types of car insurance. Keep reading to ensure you’re completely covered this winter.
Table of Contents
Liability Car Insurance
Liability car insurance is a type of auto insurance that provides financial protection. It is if you are typically held liable for a car accident in which you are involved.
The insurance covers the medical and property damage expenses sustained by the other party up to the limits set by the policy.
Liability coverage will also provide legal defense fees should the other party decide to bring legal action against you. Ultimately, this is mandatory in most states and is the most basic form of auto insurance coverage for vehicle owners.
Collision Car Insurance
Collision car insurance is a type of car insurance coverage that helps to protect you if your car is involved in an accident or collision. It ensures that any damage or injury caused by an auto accident is covered, regardless of who is at fault.
It covers the cost of repairing or replacing your car and can also cover other property damage or medical expenses. It usually pays for repairs up to the fair market value of your vehicle.
Also, minus any deductibles that you are required to pay. In addition, collision insurance provides coverage for uninsured and underinsured drivers when they are hit by a driver who doesn’t have enough coverage. This coverage can save you from facing unforeseen high costs if you are involved in an accident.
Comprehensive Car Insurance
Comprehensive Car Insurance is a policy designed to protect against loss or damage to a vehicle due to an accident or other injury beyond the driver’s control. It covers many different types of losses, such as collisions, theft, vandalism, and damages caused by nature, such as hail, floods, and fire.
In addition, comprehensive car insurance can also cover other non-collision losses, such as
- Medical payments to someone injured in your car
- Costs to repair or replace stolen vehicle parts
- Compensation for vehicle damage caused by road debris or wildlife
The benefits of comprehensive car insurance provide complete protection for your vehicle, which can save a considerable amount of money in the long run.
Personal Injury Protection
Personal Injury Protection (PIP) is one of the common types of car insurance coverage. It provides financial protection if someone is injured or killed in an automobile accident.
This coverage covers medical expenses, lost wages, and other damages. It also provides death benefits in some cases. PIP is considered a “no-fault” insurance coverage and provides coverage regardless of who caused the accident.
It also helps pay for medical expenses, rehabilitation for an injury, lost wages caused by injuries, and other incidental expenses that may be incurred.
PIP coverage does not cover property damage, pain, suffering, or other non-economic damages. Although rates vary by state and company, it is required to be offered in most states.
Understanding the details of your policy coverage limits and deductibles is crucial, as it could make a difference in your recovery.
Medical Payments Coverage
Medical payments coverage, often called MedPay, is a type of car insurance that pays for medical expenses for you and the passengers of your vehicle after an accident.
It typically covers the cost of ambulance services, hospital visits, and surgery, regardless of who is at fault for the accident. Unlike other car insurance policies that are “at fault” policies, MedPay coverage pays regardless of fault.
It is available in most states as an optional add-on to an existing liability auto insurance policy. The coverage you can purchase is typically between $1,000 and $25,000, depending on the company.
MedPay can also cover funeral expenses if the accident is fatal. Knowing the different types of car insurance available can help you determine the best plan for your needs.
Uninsured Motorist Coverage
Uninsured Motorist Coverage car insurance is a type of car insurance policy. It covers individuals and their property in an accident involving another uninsured driver.
The coverage is applicable even if the uninsured driver is at fault. It includes damage to property, medical bills, and lost wages. Uninsured Motorist Coverage is intended to protect you and your family if you are injured due to an uninsured motorist.
This type of coverage also pays for
- Carnapping
- Vandalism
- Hit-and-run accidents
- All types of uninsured motorist losses or damages
It also prevents financial losses for insured drivers caused by negligent uninsured motorists. But the costs may vary from one state to another. Talk to your insurance company to know the type and amount of uninsured motorist coverage that is best for your car.
Gap Insurance Policies
Gap insurance policies are a type of car insurance that covers the “gap” between the amount you owe on your car loan and the actual cash value of your vehicle in the event of an accident or other incident. It is vital for people who are making payments on a car and have a loan amount that is more than the car’s actual market value.
With gap insurance, you don’t need to worry about having enough money to repay the loan if something happens to your car. It is best to find an insurance agency to discuss each option in detail and which coverage you need to ensure you get the best protection possible.
A Guide to Knowing Common Types of Car Insurance
Overall, understanding the common types of car insurance can be difficult, but taking the time to research the different coverages available and considering exactly what kind of protection you may need can save you time and money in the long run.
Utilize our guide to determine the best car insurance coverage options and ensure you are protected under the right policy.
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