There are so many varieties of auto insurance out there that you should not find yourself spoilt for choice, no matter if you are a first-time buyer or just seeking a change in your current policy. But how do you navigate the plethora of information and offers that are coming at you? You do this by being well-informed.
Auto Insurance Coverage Types
Liability coverage – In cases that you are responsible for, this type of coverage will take care of expenses or a part of the expenses incurred. It is not as straightforward as it sounds because there are many types of liability coverage. These are:
Property Damage Liability -This covers damage to all property, home, car, mailboxes, and everything in between. Relevant legal bills will also be covered.
Bodily Injury Liability – If you are responsible for harm, bodily damage, or death, you will be covered under this type of insurance. This includes medical bills, legal bills, pain, suffering, and loss of income. We all know that medical and legal bills can be quite hefty so this is a good coverage to possess.
Uninsured and Underinsured Coverage – If you find yourself in a situation where the other party has caused harm in , say, a hit and run, and doesn’t have insurance, this form of coverage will protect you. Your insurance company will cover you if they aren’t able to cover the damage.
Physical Damage Coverage – Physical damage coverage relates to damage done to your vehicle. This would include damage in an accident, by theft, vandalism, and other unforeseen occurrences. Not all policies are created equal on this so do check beforehand.
Collision Coverage – This is the most common type of coverage and is pretty much self-explanatory. Most state laws require this basic coverage. What would be covered is damage done to your vehicle in the case of a collision. A deductible is what you pay out of your own pocket when a collision occurs. Choosing a higher deductible will earn you lower premiums. Most people choose the lowest possible deductible thinking it will reduce their bill: this is not so.
Comprehensive Coverage – This type of coverage needs more explanation than most. This is because many people get confused about it and misunderstand it, leading to errors. Comprehensive coverage covers your vehicle and sometimes, other vehicles by anything other than a collision.
Comprehensive coverage does not include collision coverage. Policies differ so check thoroughly before signing anything with your auto insurance company. Some commonly known situations that this form of coverage relates to are damage by animals, theft, fire, vandalism, or water. The owners of expensive cars, financed or leased cars, and sports cars are strongly recommended to get this type of coverage.
There are many more types of auto insurance coverage, but these are the five most common ones which it is essential to understand. Many insurance companies, what with the extreme competition that exists in today’s market, will offer discounts for bundling, bonuses, and various combined packages to suit your specific needs. Combining cars under one policy makes a lot of sense: it will save you time and money as well.
Understanding auto insurance is easy: the key is to read as much as possible on it, as knowledge is always the best to empower you in any given situation. Hopefully, you now comprehend the various types of coverage available and are able to pick one or customize a plan that is perfect for you. Enjoy the process