Every driver knows the importance of auto insurance. However, not everyone is aware of the different types of auto insurance available. Coverage options such as liability, collision, and comprehensive can help cover the often-significant costs of claims if an accident should occur while driving. The right auto insurance can also help protect you, your passengers and other drivers on the road.
What Does Auto Insurance Cover?
The average auto insurance policy actually consists of multiple coverages that offer different types of protection. For example, liability insurance typically pays for the other driver’s repairs if you cause an accident, while collision coverage will pay for repairs to your own vehicle. Auto insurance can also protect you against the financial risks that a person could face if their part in a vehicle accident resulted in injuries to another person. Auto insurance is designed to cover a wide range of scenarios that could happen on the road that may or may not involve other people or drivers.
What Types of Auto Insurance are Available?
When shopping around for auto insurance, you will likely come across several options. It is important to understand the different types of auto insurance so that you purchase insurance that covers your unique needs. Depending on where you live, you might find that certain types of auto insurance are mandatory.
Nearly every state in the U.S. requires motorists to have car insurance. However, each state has a different minimum amount of insurance needed. For example, Connecticut drivers must carry coverage for bodily injury liability ($25,000 per person/$50,000 per accident), property damage liability ($50,000 per accident), and uninsured/underinsured coverage ($25,000 per person/$50,000 per accident).
Here are some of the most common types of auto insurance available:
Liability Insurance
Auto liability insurance is mandatory in most states. This means that drivers are required to purchase the minimum amount of coverage according to state law. A liability insurance policy consists of bodily injury liability and property damage liability. With bodily injury liability coverage, you are protected if an accident that you caused results in injury to another person. Legal fees, medical payments and lost wages may be covered under your policy. Liability insurance also includes property damage liability. With property damage coverage, your insurance company may help pay for damages that you cause to another person’s property while driving.
Collision Insurance
Collision insurance is an essential coverage that can protect you from the repercussions of an accident. With collision coverage, your insurance company would help pay for any repairs or replacement of your vehicle if you were to get into an accident with another car. Collision insurance may also cover any repairs if you hit an object with your vehicle, such as a fence. With collision coverage, you can expect your insurance company to pay for the amount of the damages up to the actual cash value minus your deductible.
Comprehensive Insurance
Not every type of accident that occurs with a vehicle involves another car or a collision. Sometimes vehicle damage occurs as a result of fire, hail, theft or vandalism. If your vehicle is damaged by a peril that is covered under your comprehensive insurance policy, your insurance company may pay to have your vehicle repaired or replaced up to the vehicle’s actual cash value. However, you will still be responsible for paying your deductible before your insurance company reimburses you for the remaining amount. While comprehensive coverage is usually optional, you may be required to have this type of insurance in certain cases (for example, if you are leasing a vehicle).
Uninsured/Underinsured Insurance
While you expect every driver on the road to have the proper insurance, this is not always the case. If you are involved in a vehicle accident with a driver who does not have auto insurance or does not have sufficient insurance, you may be wondering how you will get reimbursed for any damages. This is what uninsured/underinsured coverage is for. If you are hit by a driver that does not have insurance or is underinsured, your policy will kick in to help pay for medical bills. Some policies will also pay for repairs to your vehicle. The amount of coverage will depend on your unique policy and whether or not the driver has any insurance at all.
Consult with JMG for More Information
In addition to the policies mentioned above, there are also less common auto insurance policies available for drivers. For example, classic car insurance, ride-sharing coverage, gap coverage, rental reimbursement coverage, new car replacement coverage and sound system coverage. You may also want to learn more about medical payments coverage and personal injury protection. For more information about the different types of auto insurance or to acquire an auto insurance policy, contact John M. Glover today.