5 Types of Car Insurance Coverage | In the USA, all states except Virginia and New Hampshire require drivers to have car insurance to drive legally on public roads. In addition, the car insurance minimum coverage varies from state to state, and in an attempt to stay right with the law, most drivers tend to opt for the minimum coverage of car insurance.
However, it is essential to purchasing suitable car insurance because it shows financial responsibility since you secure financial protection if an auto accident occurs. Furthermore, road accidents have an unexpected nature that should prompt you to get the right car insurance coverage.
Apart from the car insurance, it is also crucial to have a competent attorney such as a Tampa accident attorney who will ensure that you are well-compensated, especially if the auto accident was not your fault.
What Are the Types of Car Insurance Coverage?
A road accident can come with unpredictable outcomes such as damage to your vehicle, passenger injuries, or the damage of another car. Therefore, should you decide to purchase the state’s minimum car insurance coverage, be ready to struggle to cover a serious accident’s expenses.
Below are coverage types in a car insurance policy; some are mandatory in every state, and others are optional.
1. Liability Coverage
With this coverage, you are liable to pay the expenses of the bodily injuries and property damages you inflict on others in an auto accident. This coverage is compulsory in most states and will not pay for your damages in a road accident. Therefore it is crucial to have enough liability coverage to protect yourself from financial strain.
Liability coverage has two categories:
- Property damage liability coverage
- Bodily injury liability coverage
2. Collision Coverage
Collision coverage is an optional type, and it pays for damages to your car even when you’re at fault, and the damages could either require repairs or an actual replacement of your vehicle.
Just as the name suggests, it particularly covers road accidents that occur when you collide with another object (tree/fence) or vehicle while driving. A lender requires collision coverage if you have an auto loan or are leasing your vehicle, and it’s optional if you’ve paid off your car.
3. Comprehensive Coverage
The comprehensive coverage pays for damages not caused by collisions such as fire, theft, natural disaster damages (floods/tornado), falling objects like trees and vandalism. It is an optional type, and it has a deductible just like the collision coverage. A deductible is the out-of-pocket money you pay before the insurer steps in.
Moreover, comprehensive coverage primarily helps to pay for the repairs or replacement of your car, and it is required if you are leasing the vehicle or have an auto loan. However, those who have paid off their cars can still get this cover to avoid spending large out-of-pocket amounts when tragedy happens.
4. Uninsured/ Underinsured Motorist Coverage
An uninsured motorist is a person without auto insurance, and an underinsured motorist is one who probably has the state’s minimum car insurance coverage. For auto accidents with an insured motorist, this insurance pays for your auto accident costs up to your car insurance policy limit. For the underinsured motorist, policies vary depending on the motorist’s coverage limits.
This cover also protects your passengers and any permitted driver of the insured vehicle during the auto accident. Moreover, it is required in some states and optional in some.
5. Medical Coverage
Medical coverage is also optional, and it caters for medical expenses incurred due to road accidents. It covers medical aspects like surgeries, doctor visits, X-rays, ambulance fees, and hospital stays or visits.
Furthermore, it protects you, your passengers and any family member using the insured vehicle during the auto accident despite being on the wrong or not. It also covers injuries inflicted on you as a pedestrian or in another car.
A personal injury protection cover is required in some states, and it covers the same medical aspects as medical coverage. In addition, personal injury protection also helps to cover deductibles or compensate for lost wages due to an auto accident.
Choose the Right Type of Coverage
The type of coverage you choose will affect your car insurance policy; therefore, it is vital to examine your financial situation to know which coverage types are for you. Ensure you compare the quotes from various credible insurance websites and companies that interest you, and select the one that will increase your limits and protect your assets.