Many people make the mistake of thinking that auto insurance is a one size fits all proposition and that once you have it, you’re covered for all contingencies. Many of these same people believe that by purchasing the state minimum coverage for auto insurance, they have complete coverage for accidents.
Unfortunately, this is not the case. There are many different types of auto insurance coverage. The better you understand the distinct types of coverage available, the more informed your auto insurance purchasing decisions will be. These are the basic types of auto coverage you need to know about.
Liability Insurance Coverage
When it comes to auto insurance there are two essential types of liability coverage you need. One provides protection for bodily injury to others and the other applies to property damage.
The other important aspect of liability protection is that it helps you with the legal fees if you are sued as a result of the accident. Pay attention to limits for your liability coverage as you are responsible for damages that go beyond the liability coverage limits unless you have an umbrella policy in place that is sufficient to cover the difference.
Personal Injury Protection/Medical Payments Insurance
This coverage works similarly to bodily injury liability insurance (and is required in several states) to help cover the costs of medical expenses, rehabilitation after accidents, lost wages, and funeral costs if necessary. This coverage is different in that it extends to you and passengers in your vehicle as well as anyone who is authorized to drive your vehicle.
Collision coverage is designed to pay for damage to your car in accidents that involve other vehicles, other objects, or damage from your vehicle being overturned. It may also cover damage from potholes. You are responsible for paying the deductible before collision insurance coverage kicks in though.
Comprehensive coverage extends to damage that doesn’t result from collisions. It includes things like vandalism, falling objects, hail, or even damage from animals. This is the type of insurance you will need to pay for repairs or replacement to car windows, too.
Uninsured or Underinsured Motorist Coverage
These coverages will come into effect if you are in an accident where the driver is uninsured or if you are the victim of a hit-and-run accident or when the driver who is at fault does not have sufficient coverage for the necessary repairs to your vehicle.
If you have a loan or lease on your vehicle you may find yourself in the unenviable position of having too little insurance protection to cover a total loss of the vehicle. This can leave you owing thousands of dollars without a vehicle to drive around in. Gap coverage will help bridge the “gap” between the actual cash value of your vehicle and what you owe on your loan or lease.
Understanding the different types of insurance coverage that are available will help you find the right protection to meet your needs. Work with a reputable independent insurance agency to help determine the right combination of cost and coverage for your comfort zone.
If you need more information about your question “What are the Types of Auto Insurance Coverage?”, contact us here at BOLT Insurance Agency.