While shopping for car insurance, you will come across a number of different policies offered by the insurance companies. The policies offering liability insurance, collision insurance and medical protection are the basic ones. Besides, there are gap insurance, comprehensive insurance and many other types of car insurance policies. What leads to the presence of so many car insurance policies in the market? Learn about the 5 basic factors that decide different types of car insurance policies.
Damage You Cause or Receive
In an accident involving your car, three different types of damages may occur. Firstly, your own car may receive huge damage that will lead to considerable repair or replacement cost. Secondly, you may cause damage to the vehicle of the other driver involved in the accident. Finally, you may cause damage to the public property.
Costs for covering all these damages will be entertained by the car insurance company only if you have the right type of insurance cover. Liability coverage, collision coverage, property damage liability and physical damage coverage are among the car insurance types that you must have to pay for these costs.
Injuries You Cause or Receive
A car accident may not only lead to the vehicle or property damage, but it may also result in injuries. You must understand that the medical treatment costs are continuously rising and you may find it impossible to pay for getting suitable medical attention. To deal with such situations, you will require car insurance covers that will entertain the costs to avail medical treatment for personal injuries and also for the injuries caused to others. Bodily injury liability and personal injury protection are the two types of car insurance policies available in this direction.
Losses Not Caused by Accident
Apart from a road accident, there are many other possible ways in which your car may receive damage and losses. For instance, damage may be caused by weather conditions and natural disasters. Losses due to fire and vandalism too are commonly reported by the car owners from all over the world. Finally, your car may get stolen. All these losses call for the need of car insurance policies that provide protection against them. Comprehensive car insurance policies are the most appropriate options in this regard. Fire and theft coverage too exists for getting this type of protection.
Insufficient Car Insurance Cover
You may have adequate car insurance covers to entertain all types of damages and losses. What if the driver of the other vehicle involved in the accident is at fault and has inadequate motorist protection? This is a situation that brings two important car insurance policies into notice. Uninsured motorist protection and underinsured motorist protection policies are what will help you in such situations.
Current Car Value
Many car owners ignore the fact that the value of their cars starts depreciating after 3 months of the purchase. This means that if your car is involved in an accident after three months of the purchase; your insurance company will provide cover according to the current market price of your car. If you are paying the instalments, the money you receive from the insurance company may fall short of the money you still have to pay off. You will have to pay the remaining money from your own pocket. Consideration of such a situation has resulted in another popular car insurance policy called gap insurance.
As the owner of a car, you must carefully choose the car insurance covers that will cater to all these factors. The overall car insurance cost can be reduced by comparing various deals and by following some intelligent steps.