Basic Types of Auto Insurance
Understanding the type of auto insurance coverage available in your auto insurance policy will help you to understand what to do after a car accident. The main types in terms of auto insurance policy are:
Before purchasing auto insurance policy, you will be asked to identify how much coverage you want across the main types of auto insurance. Your auto insurance coverage choices will influence how much your premium payments are, so you need to understand what each type of auto insurance offers you:
Comprehensive coverage covers anything that is not collision related. Fires, theft, windshield breakage, hitting an animal (such as a deer) are all examples of items that would be covered under this type of coverage.
Collision coverage gives you coverage if you collide with something, such as another car.
Liability section of your auto insurance pays for the cost of anything that you are liable for as a result of causing the accident.
Medical payments pay for injury or medical payments incurred in your auto accident. This is not a medical policy, but is very basic coverage for you and your passenger should any injury incur while in your vehicle. In some states, this coverage will pay medical expenses regardless of fault, so check with your insurance company regarding the particular of your state.
You should also consider Gap Insurance, particularly if you are leasing or financing your car. Gap Insurance covers you in the event you find yourself upside down on a vehicle loan. If your car is considered a total loss in an accident, the insurance company will pay you the actually cash value (ACV) of the vehicle. If this amount is less than your loan payoff, then you will still owe money for the car, even though it has been destroyed in an accident. Gap insurance solves this problem by paying the difference between what you owe and what the car is worth. Before you purchase a car insurance policy, ask your carrier about this coverage and other kinds of auto insurance coverage. It could save you from making a payment on a car you no longer can drive.
How much coverage you need for the types of auto insurance you require is up to you, so take some time to evaluate your coverage. Get as many quotes as you can. By filling out a simple form, you can get free, no-obligation quotes.
