Common Types of Car Insurance Explained

Car insurance policies occur in different types, and each provides a specific form of coverage against risks. For instance, car insurance may cover theft, collision, or fire risks. Therefore, it is essential that you understand the different types of auto insurance and the type of coverage each offers.

Here are the common types of car insurance explained.

Liability Car Insurance

Liability auto insurance covers damages to other people when you are at fault in a car crash. This car insurance is made up of property damage liability and bodily injury liability coverage. Liability insurance caters to the other party's vehicle damages, medical bills, and legal fees if the injured party files a claim. However, liability insurance does not cover your injuries and damages to your car.

Collision Car Insurance

Collision auto insurance coverage helps pay for your car's repairs or replacement when you are involved in a car crash or hit a static object like a fence. With this type of auto insurance, insurance companies pay according to your insured car's value at the time of the accident.  

Comprehensive Car Insurance

Comprehensive auto insurance protects you from damages not caused by car collisions. Instead, it caters to damage to your car from fire, falling debris, vandalism, and animals, among other risks. If your car sustains significant damages from a covered peril, comprehensive car insurance coverage helps repair or replace the car based on its actual value.

Comprehensive coverage normally has a deductible you must pay out of pocket before the insurance company caters to any expenses.

Medical Payments/ Personal Injury Protection

Medical payments or personal injury protection assist in paying medical bills if you or a passenger in your car gets injured during a car accident. The coverage also caters to loss of wages if you or your passenger cannot work because of the accident. Again, personal injury protection caters to funeral expenses if someone dies due to a car crash.

Uninsured and Underinsured Motorist Coverage

Uninsured or underinsured auto insurance protects you if you get into a car accident with a motorist that does not have sufficient insurance or no insurance at all. This type of car insurance is only applicable when you are not responsible for the accident.  

The different types of auto insurance cover car damages or bodily injuries if you are involved in a car crash. The common types of car insurance coverage options are liability insurance coverage, collision insurance coverage, comprehensive insurance coverage, and personal injury protection. Understanding each type of insurance coverage will help you select a suitable coverage policy for your vehicle.