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A Guide on the Different Types of Car Insurance

Posted November 5, 2019 by EasyFinance.com to Insurance 1 0

It would be wise to understand the different types of car insurance. If you want to learn more, click here and check out this guide.


Are you in the process of buying or leasing your first or a new car? Have you been looking for ways to be as financially secure as possible in case of an accident?

If so, then it is important that you know about the different types of car insurance that your insurer should provide you. Certain types give you coverage for different situations, such as how your vehicle is damaged and who is involved.

While almost all states require drivers to have a minimum level of auto insurance, certain options for coverage ensure a safer driving experience. With our knowledge of finances, you can keep yourself financially, physically, and emotionally safe after an accident.

Follow this guide on the different types of car insurance to ensure your protection.

1. Liability Coverage

The first of the types of car insurance that we will go over is liability coverage, which is required in most states in the U.S. for drivers. This insurance is reserved for car accidents that are determined to be your fault.

You will be able to cover medical bills for injuries that anyone in the accident may have suffered. Liability insurance also covers damage to property that the accident may have caused.

We recommend finding liability insurance that is above the minimum requirement in your state if you are in an accident that you caused. This will give you extra protection since you won't have to worry about going over your policy limit.

2. Collision Coverage

Some types of insurance are reserved for accidents in which all parties involved have covered vehicles. A prime example is collision coverage, which handles the repairs for your car if you get hit by another car or hit fence or other objects.

Collision insurance is best saved for new and expensive vehicles. These cars will have an easier time being restored to their prime condition, while older vehicles can break down more easily and not maintain value as well.

You can also use this coverage option if your car gets totaled to pay the value of the vehicle against the high cost of repairs. Even if this insurance is optional in your state, picking it will save you money in the long run.

3. Comprehensive Coverage

Are you looking for auto insurance types that keep you covered for situations that don't involve an accident? If so, then you should consider comprehensive insurance for other situations that can damage your vehicle.

Nature can cause problems for the windows, doors, and other parts of your car through rain, snow, hail, and debris thrown your way by the wind. This coverage can also come in handy if you hit a deer or other animal.

Comprehensive coverage also protects you from theft or vandalism so that you can find easy replacements. While this insurance is also optional in most states, those leasing or paying off their vehicles may be required to have it.

4. Uninsured/Underinsured Motorist Protection

There are car insurance types that help you recover physically and financially if you're hit by someone who isn't as prepared as you are. That's where uninsured and underinsured motorist protection comes in.

Uninsured coverage protects you in hit-and-run accidents and accidents caused by someone who doesn't have insurance. Underinsured coverage comes into play when the person who caused the accident minimum amount of state-required coverage but not enough for your particular incident.

With uninsured and underinsured insurance, you can cover medical bills and repairs, depending on where you live. We recommend that you read the requirements under your state to see how much you can cover with this option.

5. Medical Payments Coverage

While some automobile insurance options focus on the damage done to or by your car, others take care of expenses for physical recovery. In this case, you should seek an insurer that offers medical payments insurance.

Use this coverage to take care of the costs associated with recovering from injuries associated with the accident. This option also helps in case other people in your car, such as friends and family, are also injured.

Medical payments coverage can take care of the costs of x-rays, surgeries, and other procedures involved in restoring your health. You can also use it to pay for additional hospital visits for more severe injuries.

6. Personal Injury Protection

Different types of car insurance are not required in certain states, but that doesn't take away the need for them in certain situations. One example is Personal Injury Protection (PIP), which is among our most recommended coverage options.

This insurance takes care of the same costs that medical payment coverage handles in addition to other expenses caused by your injuries. You can use it for loss of income if your injuries keep you from working or childcare if it makes it hard for you to take care of your kids.

We also advise using PIP if other passengers in your car are injured and experience the same difficulties. PIP can cover 80 percent of your medical costs if you have the right policy, which gives you more room to take care of related expenses.

7. Rental Reimbursement Insurance

If you manage to avoid injuries or large medical costs, you still need to worry about the damage to your car. With rental reimbursement insurance, you can stay covered in case it will take a while to fix your vehicle.

This form of coverage comes in handy if your car isn't in good enough shape to drive in after an accident. You can use this money to pay for a rental car until the repairs for your original vehicle are completed.

The amount that rental reimbursement will cover depends on how much your insurer can pay per day or per claim. You may also have to consider the type of rental car they give you.

Our Take of Different Types of Car Insurance

When it comes to car accidents, it helps to have more than just the minimum amount of insurance required by your state. While this may cost money, you can save more in the long-term in addition to preserving your health.

Different types of car insurance you use may depend on situations that you want to prepare for. Some come in handy for damage from weather, animals, objects, and other drivers, while others cover the medical side of recovery.

With this guide, you can decide which insurance type suits you and keep you and your car in good shape.

For more of our financial expertise, check out our guides today to make the most of your money and enjoy a comfortable life.

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