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Types of Auto Insurance

by kwestfall - December 4, 2020
Hand with marker over a sheet

Many first-time car owners assume that car insurance is a one-size fit all contract between an insurance company and individual car owners. This is not the case, as you will find out once you buy a new or used car.

Many are surprised when they find out that there are different types of auto insurance. They may start feeling overwhelmed when it is time to pick the kind they need. They may become confused when they get different car insurance quotes. Here, we will briefly discuss the various types of car insurance.

Liability Insurance 

This is probably the most important type of car insurance coverage. It covers you when you are involved in an accident, and it is determined that you are at fault for the accident. This is the insurance coverage that takes care of bodily injury liability and property damage liability. It will take care of the other parties’ medical bills and pay to repair their damaged vehicle or other properties hit in an accident. It doesn’t cover your medical bills or that of your passengers when you are injured, or the cost of repairing your damaged vehicle.

Collision Insurance 

This policy will take care of your car’s damage when you are involved in an accidental collision with another vehicle. It is the insurance that will help you to repair or replace a covered vehicle. It is generally sold with a deductible and will help you repay or replace your damaged vehicle, even if you are at fault for the accident.

Comprehensive Coverage 

This is the type of insurance that protects your car from certain types of damages that are not related to collisions or regular accidents, such as weather damage, an accident with animals, theft, fire, explosions, vandalism, and related issues.

Personal Injury Protection (PIP)

This is also referred to as no-fault insurance in many places. It is the type of insurance that will take care of medical expenses you incur, irrespective of who is at fault for the accident. The coverage offered by this type of auto insurance is extended to your passengers, as well as members of your households and drivers listed on your policy. This policy can cover medical bills, lost income, and even funeral costs.

Uninsured/Underinsured Motorist Protection 

This type of insurance will come into play when you are involved in an accident with a driver that is either uninsured or those whose coverage is inadequate. The coverage will pay for the medical bills and repairs when the other driver doesn’t have insurance to cover the expenses.

Medical Payment Coverage (Medpay) 

This is very similar to PIP but is limited in scope. It will cover accident-related medical expenses for you, your passengers, household members, and other policyholders.

Others 

In addition to the important types of auto insurance discussed above, there other less common types, including guaranteed auto protection (GAP) insurance, towing and labor insurance, rental reimbursement insurance, classic car insurance, personal umbrella policy, emergency roadside assistance, mechanical breakdown insurance, non-owner car insurance, and a few others.

Many insurance companies offer cheap auto insurance. However, you need to understand the types offered to you. Best car insurances must include the most important ones discussed here. To get cheap car insurance online, know the types you need, and compare different auto insurance quotes before making a decision.

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