The average American spends about $1,674 on car insurance every year.
It’s illegal to drive a vehicle in the United States without some form of insurance. Automotive insurance can pay for medical bills, replace lost income, and cater for any property damage. However, these benefits differ from one type of car insurance to another.
Each type of car insurance has certain requirements and unique monthly premiums. Here are the six major types of car insurance.
Liability Car Insurance Coverage
Having auto liability insurance is compulsory in the majority of the states. However, the policy may not pay for everything if you are involved in a road accident.
Auto liability insurance has two major elements. First, it can pay for bodily injuries, provided that they are caused by your automobile. This means that the insurance cover will pay for medical expenses and potential income loss.
The second part of liability car insurance deals with property damage. The property can include another vehicle, road structures, and buildings. In addition, this insurance will pay for the legal fees if somebody files a property damage suit.
Your vehicle may undergo extensive damage if it collides with another vehicle or object on the road. The collision coverage will pay to repair your car even if you’re the one who was at fault.
The collision can happen in several ways. For instance, you may hit another car or object while driving. On the other hand, your vehicle may roll over, or another vehicle may hit your vehicle from any side.
Collision coverage isn’t mandatory in many states, but most people choose to have it. If you want to sell your car, you may have to remove the collision insurance as it’ll reduce the resale value of your vehicle. Likewise, you’ll have to pay for the deductibles to maintain the collision coverage.
Comprehensive coverage can cater for damages that aren’t directly related to a car accident. For instance, you can use comprehensive coverage to pay for vandalism and theft. In addition, if an object falls on your car, you can also use comprehensive coverage to pay for the damages.
It’s possible to use AAA claims Texas to repair your car if a fire engulfs it. You’ll also receive payments when weather elements such as hail destroy your car. Nevertheless, you must always remember to pay premiums and deductibles in time.
The best auto insurance uses your car’s current market value instead of its replacement value. This means that the insured amount can be lower than what you spent when buying the car. As a result, some people decide to purchase extra comprehensive coverage, such as gap insurance.
Uninsured Motorist Coverage
Most people assume that the insurance provider of the person who causes an accident will pay for the damages. Nevertheless, this is never a simple thing, and some people actually do drive around without car insurance. You can still get compensated if an uninsured motorist caused an accident that you were involved in.
The uninsured auto insurance policy will provide compensation to all occupants of the car. This compensation can pay for medical costs and potential income loss. It’s also possible to claim additional damages depending on the situation and type of coverage.
Most people often pair uninsured coverage with underinsured insurance policy.
You can also choose a specific type of uninsured coverage policy. For instance, you can select one which only compensates for property and car damages. Alternatively, you can go for one that pays for medical costs and potential income loss.
Underinsured Motorist Coverage
Some motorists decide to get only liability insurance cover because they want to save money. As a result, their insurance provider isn’t obligated to pay for many things if the car gets involved in an accident. That’s why some motorists decide to go for uninsured motorist insurance.
The underinsured motorist insurance will protect you if you’re involved in an accident with a person who has a basic insurance cover. The insurance will provide compensation for property and car damages. It can also pay for medical bills and replenish lost income.
Uninsured motorist coverage varies from one state to another. Some states may place several requirements to protect underinsured motorist coverage holders. It’s, therefore, essential to seek help from a professional insurance agent.
Medical Payments Coverage
Road accidents can cause serious injuries that require costly medical attention. However, if you have medical payments coverage, you can use it to pay for the treatment. In addition, insurance coverage can pay for the medical bills of the passengers involved in the accident.
The coverage pays for ambulance costs, hospital admittance bills, and doctor consultation fees. Moreover, you can use it to pay for outpatient doctor visits and many other medical bills.
Personal Injury Protection Insurance
The adverse effects of a car accident usually extend beyond car and property damage. Not only will you have to pay for medical bills, but you may lose your income as you’re treating your injuries. If this situation continues for an extended period, you may lose a substantial amount of money.
Personal injury protection insurance protects your financial situation from deteriorating any further. It will pay for medical bills and provide money to cover living expenses. This, however, will only happen if the accident is not your fault.
Get Better Coverage by Knowing the Types of Car Insurance
You must have some form of insurance to retain your vehicle ownership. However, each type of insurance has its own benefits and drawbacks. That’s why you must know and study the various types of car insurance before you choose one. For more informative legal content, please check out our other blog posts.