10 Nov Different types of Car Insurance Coverage
What Auto Insurance Coverage Should I Opt for?
Buying a new or used car is a big deal, especially if it is your first car, the level of joy is unmatched. We all know having insurance is the law which is why it’s always best to buy the car insurance before you drive off the lot so you won’t have to worry about accidents or collisions.
Most people are generally aware of how auto insurance works but they lack knowledge when it comes to the different types of car insurance coverages. In this article, we will discuss the 8 main types of auto insurance coverages to help you decide which is the right option for you.
1. Liability Coverage
It is obligatory to have Liability coverage as it is a legal requirement without which you cannot drive on the roads. Liability insurance covers property damage and medical bills from the resulting injury in the case where you are responsible for the accident. Most US states have a minimum amount of liability insurance coverage, however, it is generally recommended to have a higher level of coverage in case of an adversity. As they say, you can never be too careful.
2. Collision Insurance
In case of an accident, the liability insurance covers the damage of the other party but if your car is damaged as well, who will cover that? This damage is covered by collision insurance. The insurance company may not pay for a brand new car but it should cover the amount the car was worth prior to the accident. Sometimes collision insurance is not essential especially if you have an older car but it is definitely important for new and expensive automobiles. Make sure you understand the risks if you opt not to select this coverage.
3. Comprehensive Insurance
Comprehensive insurance covers just about everything which is not covered by liability insurance and collision insurance. For instance, if your car was hit by a deer, damaged due to weather or it was vandalized by someone, the comprehensive insurance will take care of these types of situations. Sometimes you can reduce the price of comprehensive coverage if your vehicle has an anti-theft or tracking device installed. Always check with your insurance company on ways to reduce your annual premium.
4. Personal Injury Protection
The personal injury protection is not available in all states. This protection covers the cost of medical bills of both the parties involved in an accident regardless of who was at fault. However, if you have a good enough health insurance plan, be sure to contemplate the level of coverage you may or may not need.
5. Uninsured Motorist Protection
Although the state law suggests that every driver should have insurance, not everyone follows that. Moreover, since the liability insurance minimum coverage amount varies from state to state, in some cases the damage may not be covered if it is exceeding the coverage amount. In these situations, where an uninsured driver causes damage to you or your car, the expense is covered by uninsured motorist protection.
6. No-Fault Insurance
The no-fault insurance plan covers property damage and injuries no matter who was at fault in case of an accident. Some no-fault insurance policies are costly which is why the decision to use the coverage is made after analyzing what other insurance plan the driver has.
7. Roadside Coverage
If your car breaks down in the middle of the road and you require roadside assistance, then this insurance package is what you need. Roadside coverage covers towing and labor costs as well as helps with tire changing, jump start etc.
8. Gap Insurance
Gap insurance is meant for drivers who are still paying installments for their vehicle. In case you are still paying installments for your vehicle and face an accident in which the vehicle is totaled, the gap insurance will cover the difference amount between what the vehicle is worth and the amount you currently owe. In some cases, it will also take care of paying your insurance deductible.
Although it can be debated what insurance policy is the best in terms of coverage and pricing, there is no second opinion on the fact that auto insurance is essential. The insurance companies usually help you decide which insurance plan to choose depending on your car and financial capacity. Always consult with an insurance specialist before deciding on what coverage is best for you. Don’t put yourself in a situation where your coverage has lapsed or expired.