Most Common Types of Car Insurance Coverage

Almost every state requires some form of automobile insurance policy to drive on the road. However, this process can be confusing for many people. Each state has different requirements for insurance. Additional coverage types are not available in every state. It is important to understand the various types of insurance coverage options available before purchasing a policy. This is a list of many common types of insurance coverage that can help in your decision-making process.

Liability: This type of insurance coverage is the most required type of insurance in each state. Liability provides coverage for the other people in the accident when you are at faul. This insurance covers damage to the other vehicle. It also provides coverage for medical expenses of anyone injured in the other vehicle. Liability, however, does not provide coverage for your vehicle or the injuries of you or your passengers if the accident is determined to be your fault.

Collision: This type of insurance is an optional addition to your insurance policy. This policy will cover the costs of damages that occur to your vehicle in an accident. This policy can cover repairs or even replacement of your vehicle when a collusion occurs. This covers almost any type of accident caused by a collision with a vehicle, object, or even wild animal. For those who have financed their vehicle, the financing company may require this type of coverage until there is no balance remaining on the loan for the vehicle.

Comprehensive: This type of insurance coverage is often combined with collision coverage. As with collision, it is also required by many finance companies until you have paid off your vehicle. This covers any damage to your vehicle that occurs outside of an accident or collision. This protects from storms, theft, vandalism, or a variety of other damages that can occur to a vehicle that does not qualify as a collision.

Personal Injury Protection (PIP): This type of insurance is specific to states that have no-fault accident laws. Most states do not require this insurance, nor is it offered in all states. This insurance provides coverage for all injuries caused by an automobile accident. It does not matter who is at fault for the accident, this insurance covers the injuries of those involved. This covers medical bills not covered by personal health insurance. It can also provide coverage for loss of income, child care, and even funeral arrangements.

Auto Medical Payments (MedPay): Similar to PIP, MedPay provides coverage for injuries during an accident regardless of the fault of the accident. However, MedPay is more limited in its scope of coverage. It provides coverage for you, your passengers, your household members, and those also on the policy. It does not cover those injured in the other vehicle. This option can be very beneficial for those who do not have health insurance. Even if you do have health insurance, MedPay can cover copays and deductibles your health insurance may charge when in an accident.

Uninsured/Underinsured Motorist Coverage: Although most states require auto insurance, there are a variety of reasons why a person may not have this coverage. In addition, sometimes the coverage a person has, including state-required insurance, is limited and does not provide enough coverage for the entire cost of an accident. When those drivers get in an accident with you, you may not be able to get the immediate payments needed to cover the costs of the accident they caused. With Uninsured/Underinsured motorist coverage, your insurance will pay these costs, often with a deductible. This allows you to get the medical treatments or repairs you need immediately without the lengthy process of trying to get the other person to pay.