The best type of personal auto insurance
Updated: Sep 7
When buying an automobile, you must get insurance to follow. Auto insurances are used to protect you, your passengers, or vehicle in case something unfortunate happens.
When buying or signing up for auto insurance, you'll need to understand that common insurance policies on car or auto insurance know which is best suited for your needs.
Six common auto insurance coverage
The conditions behind these insurance coverages vary depending on where you live. Some of these coverages are mandatory in some areas, and in others, they are optional—your understanding of what is required in your state and what plan suits your situation best.
Auto liability insurance is one of the insurance policies that is mandated by law in most states. This type of insurance is used to pay for the damages you cause in the event of an accident. This type of insurance comes in forms which are:
The bodily injury liability coverage
Property damage liability coverage.
Drivers in most states have both insurance policies to have full protection in case something goes wrong.
Generally speaking, this type of insurance policy helps pay the bills on any repair to the victim's property or their medical bills if the policyholder is responsible for causing damage or injuries.
Auto liability insurance pays for another person's medical expenses and property damage in one of two ways.
Firstly, if you are at fault for an accident that ends up injuring another person, bodily liability covers their medical expense bill. For example, it stops you from having to pay for the victims Xray when taken to a hospital.
Secondly, if you damage someone's property during the accident, let's say a car, fence, or building damage liability pays for the repairs.
2. Uninsured and underinsured motorist coverage
To properly explain this type of insurance, let's look at a scenario. Imagine someone was walking the road and they get hit by a motorist. If the car owner or the car were uninsured or underinsured, this means that they may not have insurance, to begin with, or they have insurance, but it isn't enough to compensate the victim for damages. In such cases, the underinsured motorist coverage policy can be activated to help out the situation.
This type of insurance focuses on the victim, not the cause, so if a driver hits you without insurance, you're not left to fend for yourself. This type of auto insurance is considered as a form of protection for the victims in accidents.
In some states, this type of insurance is made compulsory, while it is not mandated by law in other states. Your Uninsured and underinsured liability insurance also has a slightly different interpretation depending on your state. in most states; it usually means one of the following:
The liability of the motorist isn’t enough to cover your bills after the accident
Their liability policy offers less than what is required or equal to your underinsured motorist coverage.
3. Comprehensive coverage
comprehensive coverage is a type of insurance that protects you from the cost of repairing or replacing your automobile from things like theft, fire, hail, or vandalism.
If your automobile were to suffer something of these sorts, your comprehensive coverage helps you pay for the repair, or you will be compensated with the exact value of the car in cash. This coverage comes with a deductible amount you pay from your pocket before your insurer steps in and reimburses you for an already covered claim.
This type of insurance is usually optional coverage, but your lender may need it to serve as collateral when paying off or leasing your vehicle. If you own a car, this is definitely one of the most important insurance policies to have.
4. Collision coverage
From its name, you have an idea of what is involved in this type of auto insurance. Collision insurance is the type of insurance that covers the cost of repair on your vehicle if you accidentally hit something.
For instance, if you're involved in an accident with another vehicle or your run into a wall, fence, or any other object, collision coverage pays you enough cash to fix your car's damage. In extreme cases, when you need to replace the vehicle, this coverage policy also compensates you with the car's value in cash minus the deductibles you may have paid.
Collision coverage insurance is generally optional. However, it may be required by the lessee or lender of your vehicle.
5. Medical payments coverage
What happens if you, your passengers, friends or family while driving your insured vehicle are injured in an accident? This, of course, isn't something we would hope for, but it is something that happens quite frequently. To reduce your pocket cost in such situations, medical payments coverage pays for the cost of accident injuries. The covered cost on this insurance policy may pay for hospital bills such as surgeries, Xrays, treatments, etc.
6. Personal injury protection
Personal injury protection is available in hand full of states. Like its closely related policy, the medical payment coverage, this insurance policy covers your medical bills in case of an accident with your automobile.
Also, this insurance policy can cover other expenses incurred because of the injuries. For example, you can get compensated for your job loss for getting fired while you were getting treated.
These are just six of the most used personal auto insurance policy, so now you know which insurance policy is best suited for your needs. The different components of a personal auto insurance policy are available to protect you and your vehicle. If you need more help understanding which coverage is mandatory in your state, you can talk to your local agent.