Whether you’re a new driver or looking for ways to save, it’s important to know the types of car insurance coverage you’ll need. While many policies vary state-to-state, there are 6 main components to consider when insuring your vehicle. In this post, we’ll detail the types of car insurance coverage that every driver should ask for when securing or renewing their insurance policy.
What are the main types of car insurance coverage?
If you’re shopping for car insurance coverage, you’ll want to know which plans will protect you most. Depending on your place of residence, some of these coverages might be mandatory. Others are simply an added layer of protection for you and your vehicle. First, it’s essential to look up your state’s requirements so you can better understand what the right coverage will be for your situation. Next, you can review which type of policy benefits your vehicle.
Liability coverage
Liability coverage is the minimum amount of coverage a driver can have. Most state laws mandate auto liability coverage, which are comprised of two factors:
- Bodily injury liability (covers the cost of victims injuries if you cause an accident)
- Property damage liability ( covers the cost of property damage if you cause an accident)
Uninsured motorist coverage
In recent years, this type of car insurance coverage has become more popular due to the increase in car accidents across the U.S. Essentially, uninsured motorist coverage will help pay for medical expenses or repairs to your vehicle should you get in an accident with an uninsured or underinsured driver. As of now, 22 states require uninsured motorist coverage, including New York, North Carolina, Maine, South Dakota and more.
Comprehensive coverage
Many drivers invest in comprehensive coverage because it covers a range of accidents related to your car. This includes theft, vandalism, hail storms, and other auxiliary factors that damage your vehicle. With this type of car insurance coverage, drivers will pay a deductible before your insurance provider reimburses you for any repairs or stolen property. Most of the time, comprehensive coverage is an optional add-on, but many drivers choose this type of coverage when they are leasing a vehicle.
Collision coverage
When you’re involved in an accident, whether with another vehicle or stationary object (fence, pole, etc.), collision coverage comes in hand. Not many states require this type of car insurance. However, it can help pay for any damages or even replace your car regardless of which driver is at fault.
Medical payment coverage
Medical payment coverage is offered in select states. Some drivers opt to add this type of car insurance to their policy to help in the instance you or a passenger is injured in a collision. Similar to bodily injury coverage, this insurance helps pay for any treatment following an accident.
Personal injury protection
Personal injury protection, also commonly known as PIP, helps pay for medical expenses after a collision occurs. What makes PIP different from medical payment coverage is it can help cover resulting expenses following an accident. This includes lost wages or child care. Depending on the state you live in, this type of car insurance coverage is either mandatory or optional.
Overview of the types of car insurance coverage
With 6 main types of car insurance protection, drivers have the option to take on minimum to full coverage. As a driver, it’s vital to understand the types of policies you can add to your plan. Therefore, when the time comes to renew or buy a new plan, you’ll know exactly what protection best fits your lifestyle.
On top of these main components, there is also gap insurance coverage, ride-sharing coverage, and rental reimbursement coverage to consider. Those with restored vehicles can even add classic car insurance to their auto insurance policy. Overall, we hope this list guides you in the right direction for choosing automotive protection.