Auto insurance can be very confusing, especially for first time buyers. Many different types of coverage is available to protect your most important investment. Knowing the types of coverage available can help you make a better informed decision and get the coverage that you need. Here you will learn about the different types of auto insurance available.
Bodily Injury Coverage
Most states require minimum amounts of Bodily Injury coverage to be carried on your vehicle. The auto insurance company will pay the amount of coverage you have elected to cover the costs of injuries sustained to another person after an auto accident. Most states have very low Bodily Injury coverage amounts, and you may want to increase this amount to offer full protection. Bodily Injury coverage does not cover the costs associated with your injuries in an accident, only the injuries of other parties involved in the accident.
Another type of coverage required by most states, Property damage coverage helps pay for damages to others property after an accident, including vehicle damages.
Comprehensive insurance is optional(unless your vehicle is under lease), and must be purchased with Collision coverage. Comprehensive coverage pays for damages of your vehicle for “natural acts of God”. This leaves what it will cover open. Types of things the coverage may cover include theft of your vehicle, damages caused by fire or flood, or even damages caused by animals.
Collision insurance pays for repairs to your vehicle after an auto accident. It will pay for damages or replacement of your vehicle, up to Kelly Blue Book value, regardless of who is at fault for the accident. This coverage is also optional, unless your vehicle is under lease. You can select different amounts of coverage to suit your needs.
This is always a good type of coverage to include on your car insurance policy. In some states it is mandatory, while other states keep it optional. Uninsured motorist coverage will pay for repairs if you are involved in an accident with a motorist who does not carry the state required coverage, or whose coverage does not pay for the total amount of damages received in an accident. It also covers property damage and bodily injury.
Personal Injury Protection( PIP)
Another type of coverage required by some states, but not all. Covers within the specified limits, the medical, hospital and funeral expenses of the insured, others in his vehicles and pedestrians struck by him. The basic coverage for the insured own injuries on a first-party basis, without regard to fault. It is only available in certain states. PIP coverage is a great option for those who do not have medical insurance already.
These different types of insurance may or may not benefit you. It is always a good idea to weigh the pros and cons of each type of coverage, as adding them all can be quiet expensive to do.