Types of Car Insurance Coverage

You know you need some sort of auto insurance in order to drive. The question is, what kind do you need? There are all different types of car insurance coverage, which provide for a variety of different situations. Here’s a rundown of the different types of car insurance and what they entail.

  1. Liability Coverage. If you’re at fault in an accident, liability insurance is what your insurance company pays to the other party involved. There are two basic types of liability coverage. Bodily injury liability pays for medical costs if someone is injured in the accident. Property damage liability covers things like repairing the other person’s car, in the event of a collision—or any other property you may damage. Just about every state requires you to have a minimum amount of liability insurance. If the assessed damages are more than the amount of coverage you have, the other driver may sue you for the rest and force you to pay it out of pocket.
  2. Collision Coverage. So liability insurance covers damages to the other person’s car when you’re at fault. But what about your own car? Those damages are covered by your collision insurance. However, it typically comes with a deductible—a certain amount of damages that you’re responsible for out of pocket. Anything over that amount, your collision insurance will pay for. Collision coverage is often paired with medical payments coverage. If you or one of your passengers is injured, this insurance will pay for their medical costs, such as hospital visits and x-rays.
  3. Personal Injury Protection. PIP is similar to medical payments coverage. It can pay for your doctor visits and other medical expenses if you’re injured in an accident. However, it also goes beyond that. Say your injuries are such that you can’t work for a period after the accident. Personal injury protection can cover loss of income. It can also pay for things like cleaning or child care that you may not be able to do while injured. PIP is also called No Fault insurance, as your insurance covers the expenses whether you or the other driver is at fault in the accident. It’s only available in a handful of states, though in many of those where it is offered, it’s in fact required by law, much like liability insurance.
  4. Uninsured and Underinsured Motorist Coverage. What if you’re hit by someone without insurance—or without enough insurance to pay for the damages to your car and/or person? Uninsured and underinsured motorist coverage will pick up the slack and make sure you can still get the repairs (or medical treatment) you need. It also protects you against hit and run drivers, who damage your car but don’t stop to give you their insurance information.
  5. Comprehensive Coverage. Not all damage comes from another driver. Maybe your car catches fire. Maybe it suffers flood damage during a hurricane. Maybe a hailstorm dents the roof and cracks the windshield. Maybe it’s vandalized. Comprehensive insurance covers damages from factors other than a collision.

Different states have different laws about what kind of insurance coverage they require. Do your research and find out what kind of auto insurance you need, and what kinds might be important for you to have. The more coverage you have, the better protected you are in case of disaster.

Contact us to learn more about the car insurance coverage that’s best for you!