It is necessary by law to have car insurance for every driver in the U.S. If you get into a car accident, an insurance company covers for medical expenses, your vehicle repair bills, and also defends you from liabilities.
If you have never signed up for car insurance, then it can be confusing for you to know what it is and how it covers you from various damages. A car insurance policy includes many types of coverage. It is crucial to know every aspect of it.
Your state actually has to provide you the legal information and minimum amount of coverage you will need if you are purchasing a car insurance policy. In this article, you will understand the common types of insurance coverage for a car that will ultimately help you determine the type of coverage you need.
Common types of insurance coverage
Car insurance mainly has 6 types, which will be presented to you when you are planning to purchase an insurance policy.
- Property Damage Liability
- Body Injury Liability
- Personal Injury Protection (PIP)
- Uninsured Motorist Coverage
Property Damage Liability
This insurance type covers the damages you cause to someone’s property like building, fences, lamps, mailboxes, etc. as a result of a collision. If you accidentally run into a pole or hit your neighbor’s fence, then this coverage will apply. This coverage does not apply if you have damaged your own property, for this you might need the collision coverage. The value of the property damages is $10-$25k per car accident that varies from state to state.
It is a coverage that is not related to any damage resulting from a collision. But it will cover you if your car gets damaged in earthquakes, floods, missiles, vandalism, falling objects, etc. Moreover, if your car catches a fire in the parking lot, then the comprehensive coverage will pay for the loss. It is an optional coverage, if your car is expensive and also new, then you must consider comprehensive coverage.
Body Injury Liability
If a car accident occurs and you are at fault, then body injury liability will pay for the injuries of the other party, their medical expenses, and also for their pain and suffering. For instance, as a result of the collision other driver gets a broken leg, then this coverage will also pay for surgery and x-rays, and for the time he spent without work.
If your car gets impaired after a collision, collision coverage will pay for the maintenance of your car. Collision only covers the damage of your car typically applies after the collision of one or more than one driver. However, collision coverage does not pay for mechanical issues and the normal aging of your car. That means if your car has so many issues because it’s an older one, then you should save your money and drop collision coverage.
Personal Injury Protection (PIP)
PIP or personal injury protection covers your family, you, and everyone who is entitled in your driver’s list against injuries after an accident regardless of who was at fault. PIP may also cover rehabilitation costs, funeral expenses, and work loss benefits.
Uninsured Motorist Coverage
The uninsured motorist coverage is applied where you get hit by a motorist and the driver does not have the insurance coverage to pay for your loss. This coverage also covers the expenses if you or any of your listed family member is hit. Underinsured or uninsured motorist coverage is either optional or mandatory in most of the states depending on your location.
Furthermore, to the liability insurance, you may need optional coverage for your brand new, valuable, and expensive vehicle. This coverage is not necessary and not mandated by the vehicle laws. It is on you and your agent to decide how much coverage you want for your vehicle and how much you want to spend on the insurance policy.
The Best Insurance Coverage
Not all the car insurance policies are similar, but every insurance company offers something unique to its consumers. But that does not mean you should choose any of them without comparing coverage options, customer service, and most importantly their digital presence.
Don’t overlook current and past client’s experiences on their websites. For the best insurance coverage, you can consider the following list.
|Insurance Provider||Best For|
|State Farm||Personalized Experience|
|GEICO||Rates & Discounts|
|Erie Insurance||Young Drivers|
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