Understanding the Different Types of Car Insurance

How familiar are you with your current coverage? Will you be reimbursed if your car starts on fire or is damaged by hail? Read this article now to understand the different types of car insurance available.

With so many different types of car insurance available, it’s hard to know exactly what you need. Every state has different requirements regarding car insurance which makes policies in different states unique. The following types of car insurance are the most common although the type of car insurance you require may vary.

Auto Liability

This is the most important type of car insurance and will pay for any damage you might be responsible for including injury and damage to the other vehicle or any property during an accident. Auto liability coverage typically falls into two different categories which include:

  • Bodily Injury - This type of coverage covers any medical expenses, lost wages and pain and suffering associated with an accident. It also covers any other special damagers which may arise.
  • Property Damage - This coverage will pay for any property damage and can cover expenses associated with the loss of use of a vehicle.

Auto liability also covers any legal defense and court costs which may be associated with an accident. Each state dictates their own minimums regarding auto liability though you can opt for more coverage if you feel it necessary.

Collision

This type of car insurance will pay for damage to your vehicle and can include:

  • A car accident with another vehicle
  • An accident involving another object
  • A rollover accident

Most collision car insurance will require a deductible be paid in the event of a claim being made on the policy.

Comprehensive

This type of coverage is similar to collision though it goes a step further and covers damage caused by things other than an accident with another car such as:

  • Fires
  • Wind, Hail, Floods
  • Vandalism
  • Stolen Car
  • An accident involving an animal

PIP

PIP, also known as Personal Injury Protection, is fairly self explanatory. This coverage will cover any costs associated with injuries in an accident and might also pay for:

  • Physical Rehab
  • Loss of Wages
  • Services
  • Funeral Arrangements

Uninsured Motorist

This type of coverage will help to cover expenses associated with an accident caused by a driver without insurance. Depending on what state you are in, this type of coverage may also cover property damage caused by an uninsured motorist.