Understanding Auto Insurance Plans
Auto insurance protects against a range of potential accidents, injuries, and other mishaps that could befall you or your car. It can sometimes be really confusing to know what kind of coverage you need, especially if you’re shopping for a new policy or modifying an existing policy. In this article, we’ll clear up some of the mystery around car insurance. Read on.
Types of Auto Insurance
Liability Insurance: You cause an automobile accident, and you’re found to be at fault. Who pays for the other person’s car repairs and medical expenses? Liability insurance. And, it might not be enough – especially if you’re in a state that requires higher coverage limits or if you want to carry additional coverages. Remember that liability insurance does not pay for your medical or repair expenses. Liability is often referred to as minimum coverage. Some states have very high minimum coverage requirements, so you may need more than one type of policy to have full coverage protection.
Comprehensive Insurance: Comprehensive coverage protects against damage that isn’t caused by a collision. For example, if your parked car is damaged by hail or vandalism, you can file a comprehensive claim to pay for repairs. If a tree or something else happens to fall on your car, comprehensive insurance can help pay to repair the damage. Comprehensive claims also cover theft and glass damage. Your lender may require comprehensive insurance if you have a loan or lease on your car.
Personal Injury Protection: Personal injury protection will typically pay for the policyholder’s and their passengers’ medical bills and other expenses after an accident. This type of insurance is often called “no-fault” coverage since it will cover a car’s occupants regardless of who was at fault. In the case of pedestrians injured by a car, the driver’s bodily injury liability will typically step in to pay bills.
Collision Coverage: Collision insurance covers the damage done to your car in a car crash. Collision coverage is optional, so you can choose not to add this coverage to your policy. It also covers mechanical failure or rollover damages if the cause of the accident isn’t another vehicle or object. It may even cover your rental car, so you can enjoy that vacation without worrying about any unnecessary expenses.