All You Need to Know About Car Insurance: Types of Car Insurance

May 12


Adam Mendas

Adam Mendas

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In the article, you will explore car insurance. After reading this article, you will be aware of what is car insurance and why you need insurance for your car, and how many types of car insurance are available in the market.


While having car insurance is a law required by most states but it is more than just a law. If you are at fault during a car accident then the auto liability needed on your car insurance policy helps you pay for the losses. The losses can include almost anything from other party’s medical bills or damage caused to their vehicles or loss of any other property from the accident. 


There are several types of car insurance and all of them save you from different kinds of situations. Some insurances can even help you pay your legal fee after you have taken your accident case into court. 


Why You Need Car Insurance?


  • Car Insurance May Be Mandatory

Each state’s law sets minimum auto liability coverage limits that all drivers are required to buy car insurance. A limit is a maximum amount your insurance company will pay during a claim. 


You can increase your coverage limit more than your state’s coverage limit. If you don’t then you could end up paying money out of pocket. Some states in the country ask you to have additional coverage on your car insurance. 


  • Offers Financial Protection

Let’s say you are the reason for your car accident,All You Need to Know About Car Insurance: Types of Car Insurance Articles you may be held liable for costs incurred by the accident. These costs may include a legal fee, an injured person’s medical expenses, or even lost income if the person injured were unable to work. Liability coverage on car insurance can help you take care of all these costs. 


  • Your Lender or Leasing Agent May Need Auto Insurance

If you’re financing or leasing your vehicle, the person you’re lending from may ask you to purchase collision coverage and comprehensive coverage. Both comprehensive and collision coverage may help you repair or replace the vehicle if it’s damaged during an accident. 


  • Car Insurance Can Help You Save The Repair Costs

If you own your vehicle, you may want to get collision coverage and comprehensive coverage. While mandatory liability coverage helps to pay for the damages, it is important to have coverage for your vehicle. Let’s say that you hit a mailbox and your car’s bumper is damaged, then the collision coverage can help you repair your car if you hit another vehicle or object. It doesn’t matter who’s fault it is.


  • Auto Insurance Protects Your Passengers

If you’re even in an accident, then medical payment coverage and personal injury protection can help you pay for your medical bills. It can also help you cover your passenger’s expenses after the accident. This car insurance can help in paying off medical bills, hospital visits, doctor bills, and if needed surgery. 


Types of Car Insurance


If you’re buying a new car or just looking to renew or buy car insurance, you would want to know about the most common types of car insurance available. The different types of car insurance are available to protect you, your passengers, and your vehicle if you ever come across an accident. 


If you understand what’s required in your state and what each insurance helps cover, then you can find the right type of car insurance for yourself. 


  • Liability Coverage

Car liability coverage is mandatory in almost all states. Drivers are required by law to purchase a minimum amount of liability coverage. Liability coverage has two major features:


  • Bodily injury liability can help you pay for costs related to another person’s injury if you’re the reason for a road accident. 
  • Property damage liability car insurance may help you pay the damages when you cause damage to a person’s property during an accident. 


  • Uninsured and Underinsured Motorist Coverage

If you’re in a car accident where you’ve been hit by a driver that doesn’t have insurance, having uninsured and underinsured motorist coverage can help. You can use this insurance to pay for your medical bills. If you’re hit by an uninsured driver, that means they won’t be able to pay for damage coverage or medical bills. Uninsured and underinsured car insurance is needed in some states and optional in other states. 


  • Comprehensive Coverage


Comprehensive coverage is another type of car insurance, it can help you cover the damage to your car from damages like theft, fire, and vandalism. If your car is damaged by comprehensive coverage, it can help you pay for a repair, or even replace your vehicle. This coverage comes with a deductible, a deductible is an amount you’ll have to pay right out of your pocket before your insurer reimburses you for a coverage claim.