Types of Car Insurance
When you accidentally hit somebody or damage his or her property with your car, your car insurance picks up most of the bill. Car insurance pays for charges like your medical bills or those of your passengers when you’re concerned in an accident, or when your car is damaged or stolen.
Each of these cases is covered by separate types of car insurance included within your policy. Beyond what is required by your state’s legal minimum, you’re able to modify coverage under each type of car insurance until you have adequate coverage in each component at a premium rate that’s affordable.
Knowing how each element of car insurance covers you can help you save on your car insurance premiums. Read on to learn more about the various types of car insurance.
It covers your cost when you cause an accident and are liable to pay to the victim’s accounts. In every state that requires you to have car insurance, you must have a minimum amount of liability insurance, the amount of which differs by state.
Both physical injury liability and property damage liability covered the Liability covers. When you buy car insurance, you’re paying for coverage for 3 different limits under the two main coverage of liability insurance: body injury liability coverage per person; the total bodily injury liability coverage per accident; and property loss liability.
The amounts for each are typically expressed with three digits, such as 30/50/10, meaning you have $30,000 in bodily injury liability coverage per person, $50,000 in total bodily injury coverage per accident, and $10,000 in property damage coverage. These figures have termed the limits of liability, meaning the insurer’s highest liability to you under the car insurance coverage you purchased. They are listed on your auto insurance declarations sheet, the front page of your car insurance policy.
To make sure you’re getting the utmost coverage for the car insurance rates you can afford, speak to a licensed agent who can help you match plans and get quotes.
Liability coverage for your car insurance commonly does not extend to liabilities incurred while you’re driving your car for a fare, such as driving a taxi or an Uber, or otherwise for certain business purposes.
Bodily Injury Liability
Bodily injury liability coverage pays for the expenses you’re liable for when you hurt somebody in a car accident. This covers but is not restrained to, hospital bills, loss of revenue, legal charges, and funerals.
When the victim of a car accident files a claim for physical injury, he or she truly files the claim with the other party’s insurance and the carrier pays the claimant on account of the policyholder. Insurers will only pay reasonable medical expenses, which means anything that isn’t experimental or accepted by most doctors as an appropriate treatment.
Keep in mind that physical injuries could cost the twenties of thousands of dollars if the other party doesn’t have health insurance, so make sure you buy sufficient coverage that you’re not giving someone’s medical charges out of pocket.
Property Damage Liability
That type of car insurance pays to repair or replace another person’s car when you’re liable for the loss. It also covers damage to other types of assets when owned by someone else, such as a house, a storefront, or even a tree or some expensive item. See, that property damage liability coverage does not cover damage to your own car, which is covered under collision and comprehensive insurance.
As including BIL coverage, the victim needs to a file with your own insurance company. The identical caution about costs applies, too, so be sure to purchase as much as you need lest you have to pay out of pocket for an accident you caused. The limit for property damage applies to each incident.
Personal Injury Protection Insurance
PIP term, also called no-fault insurance, helps pay for the medical bills you and your passengers incur from an accident regardless of those caused the accident. This type of car insurance only arrives into play to cover expenses not covered by your health insurance or the at-fault party’s car insurance, which could add lost wages and funeral costs.
Several states make personal injury protection optional, and those that need it only mandate that you purchase a comparatively low amount. If you already have good health insurance, you may not need Personal injury protection coverage and you can save money on your car insurance by removing it.
Damage to your auto
This is another cover under the optional coverage of collision insurance and comprehensive insurance. These two types of car insurance cover both the damage and total loss of your car under their respective terms.
With comprehensive insurance, collision insurance shields you from damage to your car. Collision insurance pays out when your vehicle hits with another car or object and you need to repair or replace your car.
The collision has its individual maximum limit of liability as well as a deductible, the amount you have to pay out of pocket before your insurance company pays anything toward your losses. Typical collision insurance deductibles are $550 or $1,000, with a more economical deductible yielding a higher premium, and vice versa. Some collision provisions also combine coverage for some personal effects, like luggage and clothing.
This type of auto insurance is optional in all-state. However, if you hire your car or purchase it with a car loan, you’ll be required by the lien holder or lender to purchase collision insurance.
Comprehensive insurance also called comp, is often bought with collision insurance. Whereas collision insurance covers damage to your car in an accident, comprehensive insurance covers your car from different types of damage, such as weather-related risks and malicious activity. As with collision insurance, comp has a deductible, which can be increased or lowered to suit your budgetary needs.
- Weapons and explosions
- Dropping objects
- Theft, destruction, larceny, or miscellaneous mischief
- Civil disturbances and riots
- Windstorm or storm
- Liquid or flooding
- Affect by an animal
Both collision and comprehensive insurance not including many other types of risks, such as freezing, regular wear & tear, or mechanical failure. For example, while riots or civil unrest are covered, war, insurrection, and nuclear contamination are not.
Although they may alter by insurer and policy, common exclusions for comprehensive and collision coverage involve:
- Pattern furnishings, such as decorated murals and furniture
- Modifications, including CD players, and televisions, unless installed by the manufacturer of the car
- Radar-detection instruments
- Any loss caused by fighting in or practicing for a race
- Government seizing or impounding
Each of these coverage and the limits that you may pick impact your car insurance premium. Therefore, it is very important to compare car insurance quotes from at least three to five insurance companies to make sure you are getting a good price.
Buying car insurance can be confusing and overwhelming for some. You can always compare car insurance quotes at MyMoneyMyQuotes.com.