posted
by Insurance Assistant
There are four main types of auto insurance available from most insurance carriers, listed below. In addition, there are any number of additional coverages that you may purchase (for a price, of course) if you have special circumstances that may warrant it, such as for a classic car (defined as 25 years old or older), which necessitates special coverage.
Here are the main types of auto insurance:
Liability — No matter where you live, this is the most common type of auto insurance required throughout the United States. It is basic coverage that will pay for bodily injury or property damage resulting from an accident. Liability car insurance only covers the other vehicle involved in an accident with you. If your car is paid not off and it is worth more than $5,000, you definitely want to consider moving from liability auto insurance to coverage that protects the value of your vehicle.
Comprehensive and collision — This is the the type of auto insurance that is mandatory if your vehicle is financed. It pays for your car. You can’t finance a car without this kind of coverage, which not only protects most of your financial investment but also protects the financing institution’s investment. It covers you against a wide range of events such as fire, theft and accidents. It is also the most expensive, but well worth it if you own a highly financed automobile. It is also not a bad idea to have this type of coverage if you paid cash for an expensive car.
Uninsured motorist — This type of auto insurance will pay expenses for the insured driver as well as passengers if they are involved in an accident caused by an uninsured driver. It is required coverage in some states. It pays only if the other person is at fault. Some states allow this type of auto insurance to be sold separately. Uninsured motorist coverage offers protection if you are involved in an accident with another driver who may not carry auto insurance or is underinsured.
No fault (Also referred to as PIP, or Personal Injury Protection in some states) — This is the type of insurance required in many states. It pays for costs related due to injury regardless of who is at fault for such things as medical expenses and lost wages, among others. Type type auto insurance pays no matter who is at fault, and some companies pay only a percentage of the first $10,000 for medical coverage.
There are other umbrella coverages that will cover a myriad of circumstances such as mechanical breakdown, car rental and auto glass replacement, among others, but these are the main ones.