Advertisements for low-cost insurance may intrigue you, but remember: the price of your auto policy is never as important as being an informed consumer. There are five major types of automotive insurance, and they’re all significant. Knowledge of the terms and conditions of your coverage may save you thousands in the long run.
When you’re responsible for an accident, Liability Insurance covers you for the cost of medical expenses from injuries sustained as well as resulting property damage. If your state has a minimum requirement for Liability Insurance, you may want to consider upping the coverage a bit. That way, you (and your wallet) are protected, and you won’t have to shell out sizeable amounts of money for claims surpassing your policy limits.
Uninsured/Underinsured Motorist Protection
This insurance helps cover expenses associated accidents in which the other driver is responsible yet possesses no insurance—or minimal coverage—and cannot afford to pay for the full cost of the damages.
Collision Coverage is responsible for the fees associated with auto repairs or for replacement of the car itself. However, if your car is totaled, this insurance will pay the car’s value. This coverage kicks in when your vehicle collides with another object or vehicle, rolls over, or your car is hit by another car while it’s parked.
Personal Injury Protection (PIP)
Sometimes referred to as “no-fault” insurance, PIP is coverage for the medical expenses of you, and any passengers, if you are injured in an accident. This insurance also encompasses injuries sustained as a passenger in someone else’s car, or if you’re hit as a pedestrian or while cycling.
Cars can be stolen, damaged by weather, collide with an animal, or be vandalized. Luckily, all of these incidents are protected by Comprehensive Coverage. If you reside in a high-crime area or a region prone to natural disasters, this insurance may be something to consider carrying. Also, most lenders demand that you hold Comprehensive Coverage until the car is paid off.
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