Auto insurance is a must for all drivers. No matter what type of vehicle you drive, or how experienced you are behind the wheel, auto insurance is required by law in most states and provides vital financial protection in the event of an accident. But with so many different coverage options available, choosing the right auto insurance for your needs can be confusing. Here are different types of auto insurance coverage and how to choose the right policy for your needs.
Liability Coverage
Liability coverage is the most basic type of auto insurance and is required in most states. Liability coverage pays for damages to other people or property if you are found at fault in an accident. It does not cover any damages to your own vehicle. Liability coverage is typically sold in two parts: bodily injury liability and property damage liability. Bodily injury liability covers medical expenses and lost wages for the other driver and passengers if you are found at fault in an accident. Property damage liability covers damage to the other driver’s vehicle.
Collision and Comprehensive Coverage
Collision and comprehensive coverage are optional types of car insurance that pay for repairs to your own vehicle if it is damaged in an accident or by a covered event such as theft or vandalism. Collision coverage pays for damages caused by an impact with another vehicle or object, while comprehensive coverage pays for damages caused by events such as fire, flooding, hail, or theft.
Uninsured/Underinsured Motorist Coverage
Uninsured/underinsured motorist coverage is an optional but highly recommended auto insurance coverage. This protects you from being hit by a driver who does not have insurance or does not have enough insurance to cover the damages they cause. If you are involved in an accident with an uninsured or underinsured driver, this coverage will pay for your medical expenses and repairs to your vehicle up to your policy limit.
Personal Injury Protection (PIP)
Personal Injury Protection (PIP) is a type of no-fault auto insurance that covers medical expenses and lost wages for you and your passengers regardless of who is found at fault in an accident. PIP is required in some states but not others, so check your state’s requirements before purchasing a policy.
Gap Insurance
Gap insurance is optional auto insurance that pays off your loan or lease balance if your vehicle is totaled in an accident and you owe more on it than it’s worth. Gap insurance is only necessary if you have a loan or lease on your vehicle; if you own your vehicle outright, it is not needed.
There are many different types of auto insurance coverage available, and choosing the right policy can be confusing. But understanding the types of coverage available and how they protect you will help you choose the right policy for your needs. Remember, being properly insured gives you peace of mind on the road knowing that you and your passengers are protected financially in case of an accident.
