Whether you are buying your first car, upgrading to a new one, or simply shopping around for a new insurance provider, it is essential to understand what the different types of available insurance policies are and what they cover.
Depending on what state you live in, different types of cover are mandatory, while others are optional. New York, for example, requires minimum levels of mandatory “no-fault” coverage as well as minimum coverage for liabilities to both one and multiple persons. For the sake of covering all bases, we are going to discuss all types of car insurance and explain why they may be most suitable for you, whether they are mandatory for your area or not.
1. Liability Cover
Auto liability coverage is usually one of the state-mandatory types of insurance cover. In fact, 49 of the 50 states in America require this cover. New Hampshire is the only state which does not, however you are required to have proof of financial responsibility in case of emergency. Tanisha from Freeway Insurance Services explained to me that they always recommend this cover first, ahead of any other, no matter where the client lives.
The liability cover is in place to cover two things. Firstly it will cover bodily injury related to another person’s injuries if you happen to harm them in an accident caused by you. Secondly, property damage is covered. This means any repairs to another person’s car, home, or other property damaged by you whilst driving.
2. Collision Cover
Collision cover is designed to help you cover the costs of your own vehicle if you are involved in an accident. This could be an accident involving another vehicle or a collision with a stationary object. The insurer will cover your vehicle up to its registered and expected cash value, minus any agreed deductible in your policy. For example, many policies have a $500 deductible value from any pay-out. This type of coverage is usually optional in most areas.
3. Uninsured Motorist Cover
Though we are currently talking about the types of insurance you should be looking to buy, sadly, many drivers do not drive with even the mandatory insurance in place. This can be a problem for other motorists as an uninsured driver may not be able to cover the costs of any damage to your vehicle. This is what uninsured motorist coverage is for. If you are hit by an uninsured driver, your insurance will repair or replace your car. Again, this insurance may or may not be mandatory, depending on the state. It is around 50-50 on how many states require this coverage.
4. Comprehensive Cover
This is another typically optional coverage and is not mandatory in many places. Comprehensive cover is an addition to all the above, as it also covers your car from theft, fire, weather damage, or even mechanical failures. This kind of coverage will again cover a repair to your car or organize a replacement vehicle for you. Though, once again, you will have to pay a deductible fee before receiving your new vehicle.
5. Medical Cover
Medical cover is self-explanatory, as most of us have some form of medical insurance anyway. However, medical cover linked to car insurance is separate. This kind of cover will assist you, and anyone who was traveling with you, to pay for medical bills after an accident. This is separate from liability cover, which covers others that you may injure. Once more, this is not normally mandatory insurance.
6. Personal Injury Cover
Personal injury cover is not available in all states and is an extension of the medical coverage explained above. With personal injury protection, you are also covered for further losses of earnings or expenses related to your injuries. This can cover loss of work, travel expenses, and even child care expenses.
How To Know What’s Right For You
Now that we have explained the different types of insurance, you may still be wondering which is right for you. Firstly be sure you have checked what is necessary for your state. Once you know the mandatory insurance coverages required, you can then look at the extra options. Many insurance brokers will provide a free quotation based on your vehicle and details, giving you options for extra coverages and showing the change in price.
So, all that is left is to get in touch with one of your best local insurance providers and find out what policies they can offer. Now you are armed with the above information, you can make an educated guess about which policies you require or want. Good luck and safe driving.
