Have you just bought a new car that needs a reliable insurance cover? Auto insurance is an essential need for all drivers. In case of an accident, the driver’s responsibility is to make sure that they have the right types of car insurance coverage.
The type and amount of coverage you need depend on your needs, budget, and risk tolerance. That is why people have different types of insurance covers for their cars, and they pay different amounts of premiums. Regardless of your situation, finding the best auto insurance should not be a difficult task.
Here is a look at the most common types of auto insurance and how they can help you when an accident occurs. Before choosing one, ensure that you are adequately protected because inadequate coverage can lead to substantial financial losses.
You may want to compare all types to see how they suit your needs.
Before you search for the best cover for your vehicle, you need to understand several factors. This is because the coverage that suits you may not be what someone else needs. Think about the following:
- The financial protection you will get after an auto accident
- The highest risk associated with your car and your driving style
- The state laws
- Important optional insurance covers
Liability insurance is important for any vehicle because it protects you when legally responsible for an automobile accident. It is helpful in case of an accident where someone else may be injured or if your property is damaged. This type of coverage also covers you if a driver claims damages and sues you.
The insurance company will pay out money to cover expenses like medical bills, repairs, and lost wages after an accident has occurred. Under this coverage, you will get two types: one covers bodily injury while the other takes care of property damage. Let us look further into the two.
Bodily Injury Liability Insurance
Auto insurance options include bodily injury liability coverage for any injuries inflicted on a person because of your mistakes. It includes medical expenses, pain, suffering, lost wages, and many others. This coverage also extends to any driver using your car as long as they have permission.
A good example is when you hit the rear end of another vehicle, and the driver suffers bone breakages. In this case, your coverage will be paying for x-rays, surgery, all hospital expenses, and the time that they lost when seeking treatment. That is why most states laws require drivers to have bodily injury insurance that is not lower than the set amount.
Property Damage Liability Insurance
If an accident causes damage to anyone’s property, your insurance company will have to pay for the losses. People mostly think about damage to the other vehicle, but this insurance also covers damage to fences, lamp posts, trees, mailboxes, buildings, and many others. However, this insurance does not cover damage to your property.
Uninsured and Underinsured Motorist Coverage
In many states, driving without the proper car insurance coverage can lead to severe consequences. If you’re ever in an accident and do not have a policy that will cover your injuries or damages to your vehicle, you may find yourself on the hook for those costs. If you don’t want this kind of uncertainty in your life, make sure that it includes uninsured and underinsured motorist coverage when you get auto insurance.
This will provide financial protection if someone who doesn’t have any type of insurance or has an inadequate one causes damage to your vehicle during an accident. It also pays for damages when you or someone allowed to drive the car gets hit by an uninsured or underinsured driver. The best part is that it also compensates you if you are hit by such a driver when you are a pedestrian.
Types of Car Insurance: Motor Vehicle Collision
Collision insurance covers your car when you hit another vehicle or object. It is the kind of insurance that the insurer will draw from when you make a claim. However, it will not be utilized when the other driver was at fault because this should be taken care of by their damage liability coverage.
You also need to know that this kind of insurance does not cover damage to a car caused by mechanical problems. You also do not qualify for compensation when the normal aging of your vehicle leads to the collision. If any of these factors lead to failure in transmission, the coverage does not apply.
Medical Payments Car Insurance
For medical payments coverage, you will be compensated for treatment of injuries sustained by the people in the vehicle at the time of the accident. This coverage does not include property damage, so you should only expect to get financial assistance for treatment. It also does not include loss of wages and similar losses.
However, it will cater to your treatment if you were a pedestrian hit by a car. Please note that this cover has a limit, which represents the maximum amount that the company will party for the treatment of a person. That is why you should seek guidance from a licensed insurance agent before you buy this cover.
Personal Injury Protection
If you want a cover that will rescue you from financial uncertainty regardless of who caused the accident, you must add personal injury protection to your coverage. Even if you live in a no-fault state, you need it because both you and the passenger will receive treatment no matter what leads to the accident. It may also cover the expenses for rehabilitation and funerals.
The cover goes further to cover expenses such as childcare and household services if you are incapacitated by injuries resulting from an auto accident. In some cases, work loss benefits and various other non-medical expenses. The aim is to ensure that the auto accident does not make life unbearable for you.
Roadside Assistance Coverage
Sometimes, you may be stuck on the highways without any money to save yourself from the situation. Maybe, the car has to be towed to safety, or a mechanic needs to come to the site. If you are in such a situation, you need to get help fast, and it could come from a roadside car insurance policy.
Apart from towing, this insurance will pay for service calls to make sure that you have all the needed help. Although it is optional, anyone who has ever been in an emergency knows how helpful it can be. You may need to change a tire or have some gas brought to you, and the communication has to happen fast.
Cars start depreciating in value the moment they leave the dealership. Even before you finish paying for that vehicle, its value will be nowhere close to what you are paying. That means that the loan amount will be less than what dealers expect to recover from you, and it can leave you in a difficult financial situation.
Some dealerships will provide insurance to cushion customers from this problem, but sometimes, you have to find your own solutions. Talk to your insurance agent and find out the offers that they have on gap insurance. It is always good to protect the value of your new acquisitions.
New Car Replacement Cover
You may want to replace your car with a newer model, especially when you are sure you did not get what you wanted. Because of the depreciation of these assets, the dealers will value them lower than the replacement, even though they were the same price when you bought them. That is why it is advisable to look for new car replacement insurance.
Sometimes, you may not get enough from your claim for a replacement to get a new car. However, when you have this insurance, you can contact the company to pay. They will bridge the gap between the new value of your current car and the cost of a similar replacement.
Rental Car Coverage
If your vehicle is not drivable and you need to rent one, you will have to pay a daily rate for the entire duration. If you are going on a vacation, this can be costly. That is why rental car coverage is needed to help you pay for the entire duration.
This cover is designed to help you avoid hefty payments for cars that you rent. When you have one in place, the insurance company will pay based on your premiums. However, you need to know that it always comes with a limit to the amounts that the company can pay.
Get Car Insurance From a Registered Insurance Agent
Have you made your mind up about the best types of car insurance? This information should be enough to help you choose a cover that will make you comfortable regardless of the situations you find yourself in when driving. You should find a registered and trusted insurance agent to help you get reasonable offers on auto insurance.
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