Six Types of Auto Insurance Coverage Explained

Car insurance is one of the most common types of insurance available. You need it, but what kind of coverage? Do you know how much?

1. Liability Coverage

Liability coverage protects you if you cause harm to others, including bodily injury or property damage. It may assist in recovering another person's medical fees or the price of repairing their vehicle and property that was damaged in the collision.

Most states have mandatory minimums for how much auto liability coverage you must obtain. When you have enough liability coverage, you will often incur fewer out-of-pocket expenses. In other words, pay a little more now so you don't have to spend much more later.

There are two forms of liability coverage: bodily injury liability and property damage liability.

If you cause an accident that injures others, your bodily injury liability coverage may help cover the costs of medical bills, missed earnings, and legal fees.

Property Damage Liability: If you cause an accident, your Property Damage Liability Coverage may cover the damage to property (other than your automobile) caused by the accident.

Consult with an insurance representative to ensure you have the appropriate level of liability coverage.

2. Collision Coverage

Accident coverage protects your vehicle against damage in any form of accident, whether another driver is present or not. It helps to cover the price of automobile repairs.

If you crash with another motorist on the road, collision coverage will cover you regardless of responsibility. It will also cover you in an accident if you are the lone driver, such as if you struck a tree or a mailbox.

While collision coverage protects your automobile, it does not pay for medical costs, missed earnings, or anything other than car repairs.

3. Comprehensive Coverage

Comprehensive coverage also includes repairs to your vehicle, but only for damage caused by events other than a collision. This contains items such as:

Theft
Vandalism
Weather and Natural Disasters
Fire
Animal harm

Essentially, comprehensive coverage protects you against the unexpected. And if you're a seasoned driver, you know it's best to anticipate the unexpected.

4. Uninsured/Underinsured Motorist Coverage

If you collide with an uninsured driver, Uninsured Motorist Coverage takes over. It covers automotive damage, medical expenses, and missed earnings as a result of an accident (up to policy limits).

If the other driver lacks insufficient vehicle insurance to pay the expenses of the collision, Underinsured Motorist Coverage comes in to cover the remaining costs (up to the policy limitations).

5. Medical Payment Coverage

Medical Payments Coverage, or "MedPay," compensates for medical bills for you and your passengers after an automobile accident, regardless of who was at fault. It covers:

Medical expenditures include hospital bills, doctor's fees, treatment charges, prescriptions, and so on.

Ambulance fees: A transport to the hospital might be costly, but MedPay can assist.

Passenger coverage: Personal Injury Protection may cover any passengers in your automobile who have been hurt.

Medical Payments Coverage is optional in most regions, but it may be a wise decision if your finances cannot sustain unexpected medical expenses or if you often drive with passengers.

6. Personal Injury Protection

Personal Injury Protection (or "PIP") coverage provides for medical bills for you and your passengers after an automobile accident, regardless of who was at fault. It's only accessible in certain states.

If this seems identical to medical payments coverage, it is because they are, although PIP coverage is more extensive. In addition to the coverage outlined above, Personal Injury Protection includes:

Lost wages: If you are wounded and unable to work, it may be possible to recover some of your lost income.

Rehabilitation: assists with the expenses of physical or occupational treatment, if required.

Funeral expenses: If you die in a vehicle accident, it might help your family cope with the financial burden of a funeral.

Personal Injury Protection includes a little more than what is described here, but these are the fundamentals. For a more in-depth look, see Personal Injury Protection Coverage.

Additional Auto Insurance Choices

Your automobile insurance might go beyond the coverages given thus far. For additional protection, you may supplement your insurance with a-la-carte coverage (at an additional fee).

New Automobile Replacement Insurance: This coverage protects your investment in a new automobile purchase. If your new automobile is severely damaged in a covered accident, most insurance providers will only pay the current market value of your vehicle. Country's The Keeper® will pay for a brand-new automobile of the same make and model if the damage cost exceeds the new car price. Ask your insurance agent about The Keeper for more information on how this coverage works.

Auto Glass, Windshield Repair and Replacement Coverage includes damage to the headlights, taillights, and automobile windows.

Emergency Roadside Assistance: Covers the expense of emergency care if you get stuck on the road. It includes such services as towing, locksmith fees, flat repairs, and more.

Rental automobile coverage: While most automobile insurance plans provide enough protection for rental cars, this supplemental coverage may give an extra degree of security.

Personal Effects Coverage: This coverage protects any goods that are taken from your automobile, such as your phone or laptop.

Find the Coverage that Best Suits You

Hopefully, this information has helped to clear up any misconceptions about vehicle insurance coverage.

If you're ready to add or alter your insurance policy, contact your agent. They can help you calculate how much coverage you need, answer any questions, and get a car insurance quotation.