On the surface, car insurance seems simple. You pay an insurance company, they help cover costs if you’re in an accident, and you’re set; seems easy enough, right? However, there’s a lot more to auto insurance than that, as there are multiple types of coverage to choose from. The bright side is that this means there are more options for you to find the perfect plan for you. The downside is that it can begin to feel a bit overwhelming when you’re shopping for coverage.
Choosing the right type of car insurance for you depends on a few factors: where you live, how much you drive, and what your budget is. Knowing the different types of auto insurance available can make it a lot easier to figure out what you should be looking for. Here are the different types of coverage available to you:
Liability coverage is the most basic form of car insurance. No matter what type of insurance you opt for, it will include liability insurance, which is required by law in every state except New Hampshire and Virginia. Liability coverage covers both the medical expenses, and the property damage if you are the responsible party in an accident.
Since you are legally responsible for covering the costs if you are responsible for an accident, liability coverage is a necessity, to help you cover the costs should such an incident occur.
Collision coverage is the car insurance that covers your vehicle if you’re involved in an accident. Whether you are in an accident involving another vehicle, or you simply crash your car into a tree, telephone pole, or other inanimate object, collision coverage is what covers the damage that occurs to your vehicle.
Collision coverage is especially important if you have a car that is worth enough that you wouldn’t be able to afford the repairs, or to purchase a new car if yours is totaled.
Comprehensive coverage takes care of your car should damage occur to it in non-collision situations. For instance, if your car is vandalized, damaged by a storm, or damaged while being broken into, comprehensive coverage will take care of the damage that your vehicle sustains. It’s worth noting that, if you hit an animal while driving, such as a deer, any damage that occurs falls under the umbrella of comprehensive coverage, not collision coverage.
If you live somewhere where your car is subjected to frequent damage, you’ll definitely want to consider comprehensive auto insurance.
While liability, collision, and comprehensive coverages are the primary forms of car insurance, there are a few supplemental packages that you can purchase to make sure that your auto insurance plan covers all of your needs.
Uninsured/underinsured motorist coverage helps protect you in the event that you are involved in an accident with an uninsured or underinsured driver. If an uninsured or underinsured driver is responsible for an accident involving you, this coverage makes sure that liability coverage is provided to you, so that your medical expenses and vehicle repair costs are all covered. Medical coverage helps cover the medical expenses for you and any of your passengers if an injury occurs during an accident. In general, medical coverage is not necessary if you have health insurance.
Personal Injury Protection (PIP) coverage is essentially a more comprehensive version of medical coverage. PIP covers not only the basic medical costs from an auto accident, but also any supplemental expenses, such as funeral costs, rehab and physical therapy costs, and missed work costs.
With all these available types of automotive car insurance, there’s no question that you can find a package that is perfect for you, your car, your driving situation, and your wallet. Knowing what’s out there can help you make sure that you end up with an ideal car insurance coverage plan.