What are the Different Types of Car Insurance Coverage?

Car insurance comes in many shapes and forms. Before you accept any old policy familiarize yourself with the different car insurance coverage options as well as the rules and regulations in regards to insuring a vehicle is your particular state - is it a no fault system or tort?. You don’t want to get into an accident and find out after the fact that you are not adequately insured. Compare your coverage options as well as your policy limits before you hit the open road for the safest ride possible.

Basic Coverage Liability Insurance

Most states require their drivers to purchase liability coverage. Liability insurance comes in two different forms – bodily injury and property damage. When living in a state that operates under a tort system (which most states do), this coverage will pay for the costs to the other driver if you are found liable for the accident. Bodily injury liability will pay for his medical related expenses and property damage protection will pay for any vehicle or other property damage the accident has caused. If, for example, you crash into a fence, property damage protection will pay for a replacement.

Liability coverage is usually part of the basic coverage policy. Some states require their drivers to purchase only liability coverage while others also require their drivers to have additional coverage, as outlined below. You will most likely need to purchase at least $5,000 worth of property damage protection as well as at least $15,000 of bodily injury protection per person up to $30,000 per accident. For many states, these minimum requirements are much higher.

Full Coverage and Optional Extras

In addition to liability coverage, you should also look at the various other forms of insurance and protection offered. Collision coverage will also pay for any on road costs to your car in the event of an accident. If you are found at fault for the accident, then collision coverage will pay for any damage to your own car. If you are without collision coverage but are found accountable for the accident, then you will need to pay for any repairs to your car out of your own pocket.

Comprehensive coverage refers to third party damage to your car including theft, vandalism, hit and run and storm related damage. Collision and comprehensive coverage, together with liability insurance, are often referred to as ‘full coverage’ in many states.

You can also include personal injury protection (PIP) insurance on most policies which pays for any medical related costs to yourself and to your passengers regardless of who is found at fault for the accident. PIP has several categories for compensation including funeral and burial costs, rehabilitation and loss of income coverage. In some states PIP is mandatory; in others it is optional.

Uninsured/underinsured motorist coverage is another type of insurance for drivers that is mandatory in many states but not all of them. Uninsured motorist coverage will pay for any damage you can sustained if the other driver is found at fault but not adequately covered. With this type of insurance, you are protected on the road, even if the other drivers around you are not.

You may also want to consider roadside assistance or breakdown coverage which pays for towing related costs to your car. Another good option to add onto your policy is loss of use coverage which pays for you to rent a car if yours is too damaged to drive. Make sure you compare all coverage choices and base your decision on your individual car insurance needs.

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