19, July 2021

Types Of Auto Insurance Policies And What They Cover

If you have bought a new car, the next thing you would want to do is have it covered for insurance. There’s hoping that you can just choose the first policy offered to you, but that is not as easy as that. You need to be familiar with the different types of auto insurance policies available for car owners like you before even availing one. Take note that each of the insurance policies discussed below come in varied pricing schemes.

Bodily Injury Liability Coverage

This can be used to apply to injuries that you cause to the other party, as the policyholder or driver, during a car accident. This type of policy also covers family members who are driving somebody else’s car with the permission of the owner.

You have to take note that you need enough coverage for this one, so that in case you, or those you love, get involved in a serious accident, there is enough to cover for the liability you caused the other party. There is a set minimum liability insurance depending on the state you live in, but it is recommended that you buy more than that so that you will not need to exhaust your savings and other properties in case of an accident.

Collision Coverage

This type of coverage, as the name implies, can be used to cover damages to your car in case of collision with another object, or another automobile. It is also an insurance policy that you can use in case your car gets damaged due to potholes.

This type of insurance policy is often sold separately, which means that there is a separate allowable deductible to it. Simply put, even when the accident was your fault, there is a fair chance you will be able to reimburse repair costs pertaining to your car, less the deductible, of course. In case the accident was not your fault, your insurance company will run after the insurance provider of the other party. You may even claim for deductible reimbursement if this happens.

Comprehensive Coverage

This does not merely cover payments for car repairs in case of accidents. It also covers other incidents like loss arising from damage or theft resulting from reasons other than collision. This includes fire, explosion, windstorm, vandalism, earthquake, riot, or even contact with deer, birds or other animals. This covers windshield repairs as well. Just like the collision coverage, this comes with a separate deductible.

Medical Payments Coverage

Otherwise known as personal injury protection (PIP), this coverage is used to pay for medical expenses incurred by driver and passengers for the treatment of their injuries due to an accident occurring from the policyholder’s car. It covers everything from lost wages to cost of replacing services to funeral costs.

Property Damage Liability Coverage

This covers damages you, or someone you permitted to drive your car, caused to another person’s property. This also includes damages to the car of the other party involved in the accident, likewise fences, buildings, telephone poles, and other structures that you may have accidentally hit while using your vehicle.

Uninsured/Underinsured Motorist Coverage

This type of coverage is most helpful when you, or a family member, or a designated driver meets an accident, and the other party involved has insufficient to no insurance at all.

This is also helpful for covered drivers who become victims of a hit-and-run incident.