Purchasing an auto insurance is an overpowering experience, especially if you’re doing it for the very first time. There are several auto insurance firms offering various products to their customers. One should therefore choose a policy that will perfectly cover the specific needs of third part and driver, vehicle as well as the driving conditions in a specific manner. Premium increases with an increase in car insurance coverage. When buying an auto insurance coverage, include all the needed features and forego the features you don’t want by customizing your plan.
Auto insurance is made up of many different coverage types. In this article, we’ll look at how various types of insurance coverage cover damages, accidents and injuries as well as how they shield the drivers from paying the medical bills and repairs.
In addition, you can learn about the special types of auto insurance policies that include SR-22 and non-owners as well as dollar-a-day insurance.
Types of Auto insurance coverage
- Liability coverage
When you cause a road accident, that is when the accident resulted because of your fault, you’re liable to cover for any property damage and injuries sustained by other parties during the accident.
These costs of property damage and injuries very costly. This is specifically why drivers should carry this type of coverage when driving their car.
In the United States, all states, besides New Hampshire, Virginia and Mississippi, requires casualty insurance or liability coverage as the unquestionable minimum. With that in mind, it’s illegal to drive a car without the liability coverage in most states in USA.
The liability insurance covers property damage and bodily injury of the third party, although it won’t cover the injuries that are sustained by the driver or his passengers. In addition, liability insurance doesn’t cover damage or repairs of your car.
However, if it does, it will be very low. Therefore, it’ important to purchase extra coverage for greater protection. To complicate things even further, auto insurance laws vary from one state to the other.
- Collision coverage
We’ve previously seen that liability insurance pays for the property damage and medical costs of the other party. So, who will cover the damages of your car when you’re liable for an accident? The answer is simple, collision coverage.
Collision insurance takes care of any expense to either replace or fix your car after the crash. This coverage includes the damages that occur after you crush into another vehicle and object, or if the car rolls, flips or spins in the road.
Collision coverage isn’t a major insurance coverage in most states in USA. However, having both collision and liability coverage will offer your extra protection against huge financial losses after occurrence of an unexpected accident.
- Comprehensive coverage
This type of auto insurance coverage is also referred to as the ‘Acts of God’ coverage since it covers the damage to your car that isn’t caused by car accidents. This insurance coverage has been designed to offer you and your finances protection from considerable repair bills that result from claim that are not related to car accidents.
The coverage protects your car from; vandalism, falling objects, fire, natural disasters, wind storm, glass breakage, civil disturbances/ riots and theft.
- Full coverage
Typically, car insurance providers offer comprehensive and collision coverage in one policy referred to as ‘full coverage’. Practically, full coverage does not really exist of or in itself.
It’s basically utilized to describe many types of auto insurance policies that are meant to offer a complete protection level against any accident, like combining comprehensive coverage, liability insurance and collision coverage.
- Under-insured/ Uninsured motorist coverage
Under-insured or uninsured motorist insurance protects you and your vehicle from the road accidents that are caused by other drivers that do not have car insurance.
In addition, this coverage can cover your vehicle repair bills and medical bills from the drivers at fault if they do not have enough insurance coverage. This coverage is need in approximately half of all the sates in USA.
Uninsured motorist BI (Bodily Injury) and uninsured motorist coverage will cover pain & suffering, lost wages and medical expenses for you as well as your passengers.
Moreover, this policy will cover the medical expenses of you and the passengers, if you become a victim to hit-&-run accident. The uninsured motorist insurance coverage might also pay for property damage like your fence, house and particular personal items.
On the other hand, under-insured motorist BI (Bodily Injury) coverage pays your medical bills if the insurance of the liable party isn’t sufficient to cover your entire medical bills.
Deciding on the type of auto insurance coverage to purchase depends on certain factors. Some of these factors include; the specific needs of third part and driver, vehicle as well as the driving conditions. Choosing the best auto insurance coverage will help you maximize benefits and minimize risks.