Categories
Insurance

The Different Types of Car Insurance Explained

It doesn’t matter who you are or how important you may be; everyone who operates a vehicle on U.S soil must be properly insured according to the law. That said, not all insurance is equal, and there can be many options that make choosing insurance confusing.

If this is your first time buying insurance, then this article is an essential read. If you’ve bought insurance before but never had to use it, then this is an important read for you too. You may think you understand different types of car insurance and various related terms, but you could get caught out if you have an accident and want to make a claim.

How Comprehensive Is Comprehensive?

The term comprehensive may lull you into a false sense of security. This type of insurance will cover lots of things that can happen to your vehicle except a collision. Fire, flood, and vandalism are all the sorts of things this insurance will cover.

Interestingly, this level of insurance isn’t mandatory. Many people who own a more expensive car opt to include comprehensive as they don’t want to get caught out with some event beyond their control that leads to serious damage to their vehicle.

It Is Your Fault

This is the basic liability insurance that’s a mandatory requirement for all drivers. This type of insurance will help pay for damages to the other person’s car and also any physical harm and the costs associated with that.

The level of liability insurance can vary depending on many factors such as your age, vehicle, and driving history. Most states have a minimum level of insurance, but it is possible, and in some cases wise, to top up the level insurance so that you don’t get stuck having to pay compensation out of your own pocket.

Damage to Your Vehicle

This is collision coverage in the event you incur damage to your vehicle by hitting something else, such as another car, person, object, etc. Even though it will be an accident, this is some sort of damage to your vehicle that’s not the fault of some other driver but is your error or associated with an unforeseen event.

Another Party Has No Insurance

Even though it’s illegal, that doesn’t mean it won’t happen. What to do if you get hit by someone without insurance and money to pay for the damages to your vehicle? You can add this option to cover you through your liability insurance.

Add on Insurance

There are many other add-on elements to your insurance that you can opt for if you wish. These include things like having an accident while your vehicle is bought on credit, and the residual value of the vehicle is less than the outstanding credit payments.

You can also boost your cover for any potential physical harm you experience etc. You can check out some auto insurance quotes and find out what’s possible and how much it will likely cost.

Different Types of Car Insurance — Clear the Fog

In this article, we have helped clear the fog on the different types of car insurance. Don’t get caught out by terminology that might be misleading. Recognize that in your state, there is minimum liability insurance that you must have legally, but that there are several other options you should consider to protect yourself financially.

That’s the key to insurance; it’s not just about your car but your financial health post-accident. Check out the other latest posts on our site that bring you other insights from the automotive industry.

Leave a Reply