Auto Insurance provides financial protection against physical damage or bodily injury resulting from traffic collisions and against liability that could also arise because of it. Anyone driving a car is required to have a minimum level of auto insurance by law. However, along with minimum coverage, there are various types of auto insurance each of which has its unique function and benefit. Here are the six most common auto insurance types:
Liability auto insurance is a two-part coverage including coverage for Bodily Injury and Personal Property. It will pay for other party’s medical expenses, personal injuries, and property damage if you cause an accident. It will not provide coverage for you or your passengers if you are injured or your vehicle is damaged as a result of the wreck.
Collision Insurance is one of the basic types of auto insurance. It covers some or all of your car repair or replacement costs if you’re in an accident with another vehicle or an object such as a guardrail, a building or a tree. Collision Insurance also provides coverage in case if no object or vehicle is involved in the accident such as if you roll over or flip your car.
Comprehensive insurance coverage is one of the main coverages available as part of a car insurance policy. Also known as “Other Than Collision” or “Fire and Theft,” Comprehensive Insurance covers losses from damages other than an accident such as vandalism, riots, floods, hail, fire, animal collisions, and theft.
Uninsured/Underinsured Motorist Coverage
According to the Insurance Information Institute (III), one in eight drivers on U.S. roads is uninsured and being in an accident with just one of them could put you at financial risk. That’s when Uninsured/Underinsured Motorist Coverage comes in help. It provides Liability (Bodily Injury and Property Damage) coverage for you if an uninsured or underinsured motorist is at fault in an accident.
Auto Medical Payments (MedPay)
Auto Medical Payment Coverage can cover medical expenses for you and your passengers in case someone is hurt in an accident. It also functions as an additional Health Insurance for those who have it and a useful substitute for those who don’t.
Personal Injury Protection (PIP)
Often called “no-fault” coverage, Personal Injury Protection (PIP) is similar to Medical Payments coverage, but it provides a wider range of coverage of costs. It covers medical expenses that may incur in an accident regardless of who is at fault. Also, the coverage can extend to other drivers listed on your policy such as members of your household and your passengers.