{"id":2006,"date":"2023-10-29T19:16:02","date_gmt":"2023-10-29T19:16:02","guid":{"rendered":"https:\/\/businessyield.com\/ins\/?p=2006"},"modified":"2023-10-29T19:16:04","modified_gmt":"2023-10-29T19:16:04","slug":"the-main-types-of-car-insurance-coverages","status":"publish","type":"post","link":"https:\/\/businessyield.com\/ins\/car-insurance\/the-main-types-of-car-insurance-coverages\/","title":{"rendered":"THE MAIN TYPES OF CAR INSURANCE COVERAGES: 2023 Update"},"content":{"rendered":"

Full-coverage car insurance, which combines liability, comprehensive, and collision policies, is sufficient to cover all but the most unlikely events. Whether or not other drivers opt for insurance, you should take steps to protect yourself on the road by purchasing the appropriate policy. The rental car<\/mark> company may provide you with four different types<\/mark> of insurance<\/mark> coverage: loss damage waiver (LDW), liability coverage, personal accident insurance<\/mark>, and personal effects coverage.<\/p>

Learn about the various car insurance coverage types available to you below.<\/p>

Types of Car Insurance Coverages<\/span><\/h2>

There are many types of car insurance coverage that several companies offer motorists. Some are standard car insurance, while others can be added as riders<\/a>. The following are the main types of car coverages in the insurance industry:<\/p>

#1. Liability Coverage<\/span><\/h3>

Anyone who owns or operates a motor vehicle should have liability insurance at the very least. If you do not have liability insurance, you would have to pay for any damage you cause to someone else’s car or person. Most states’ legislation mandates this. <\/p>

Every state requires drivers to have liability insurance, except New Hampshire (where drivers are exempt from carrying auto insurance if they meet the state’s minimum financial responsibility requirements) and Virginia (where drivers can opt out of purchasing insurance by paying an uninsured motorist fee of $500).<\/p>

Types of Liability Insurance<\/span><\/h3>

Most states’ minimum liability insurance requirements include protection against bodily injury and property damage. When you hit someone or something, bodily injury coverage will help pay for medical bills, while property damage coverage will help pay for repairs to the other vehicle or the damaged property. <\/p>

#1. Bodily Injury Liability Insurance (BI)<\/span><\/h4>

When you cause bodily harm to another person and are found legally responsible, your liability insurance will help cover their medical bills and other associated costs. People who are listed as drivers on your policy, including yourself, can use this coverage. Medical costs, legal representation, lost wages, emotional distress, etc. are all covered by this policy. The minimum amount of bodily injury liability insurance required by your state can be found in its statutes. <\/p>

Bodily injury coverage on a car insurance policy might read $25,000\/$50,000. This means that you are covered for up to $50,000 in bodily injury per accident and up to $25,000 per person. <\/p>

#2. Property Damage Liability Insurance (PD)<\/span><\/h4>

Your liability insurance will foot the bill if you accidentally cause damage to another person’s property. It pays for repairs to the other driver’s vehicle or other property you may damage. “Other property” can refer to things like walls, fences, and even mailboxes, and other equipment.<\/p>

If you cause damage to someone else’s home, the insurance company will cover the cost. Let us say you are driving through a residential area when the brakes suddenly fail you. You lose control of your vehicle and careen off the road, crashing through someone’s yard and onto their porch.<\/p>

If that were to happen, your property damage liability insurance would pay for any necessary repairs to the house up to the policy’s maximum. Afterward, if there is still money needed to finish the repairs, the policyholder can collect it from their insurer. A typical property damage coverage limit on an auto insurance policy is $25,000.<\/p>

#2. Full Coverage<\/span><\/h3>

Leasing or loaning a car requires you to have collision and comprehensive insurance. It covers losses due to hazards like fire, theft, vandalism, broken glass, and animal attacks. When you buy comprehensive coverage, you have to pay a small amount of money upfront before your insurance starts to pay for things.\u00a0<\/p>

It is not required by law, but if you want to finance or lease a car from a bank, you will need this coverage. In addition to collision insurance, comprehensive protection is recommended for people who still owe money on their car or who drive a newer, more expensive model.<\/p>

Theft, fire, vandalism, extreme weather, and falling objects are just some of the non-collision events for which your car will be compensated under this policy. <\/p>

#3. Uninsured Insurance or Underinsured Insurance<\/span><\/h3>

If someone without insurance hits you, uninsured motorist coverage will cover your medical expenses and vehicle repairs. In the event of a hit-and-run accident, this insurance will typically cover your expenses.<\/p>

Underinsured motorist coverage is similar to collision coverage, but it kicks in when the other driver does not have enough liability insurance to cover your losses when they hit you or your vehicle. Let us say someone hits you but only has the state-required minimum amount of liability insurance. If your damages are greater than their cap, underinsured motorist coverage would take over to cover the difference. <\/p>

To safeguard yourself, your passengers, and your vehicle, it is important to have coverage for both uninsured and underinsured motorists. While not always necessary, all drivers should have insurance to protect themselves from having to pay for accidents they did not cause.<\/p>

This type of insurance covers medical and injury-related expenses for you or your passengers if you\u2019re in an accident with an uninsured driver. May also cover damages to your vehicle, depending on your state.<\/p>

In the event of an accident in which the at-fault driver does not have auto insurance, uninsured motorist bodily injury coverage (UMBI) will pay for your medical bills, lost wages, and other costs associated with the incident. If an uninsured driver causes an accident, your insurance policy will pay for your vehicle’s repairs.<\/p>

#4. Collision Coverage<\/span><\/h3>

Your collision insurance will pay for any repairs necessary because of an accident. As with comprehensive, this type of insurance is voluntary and not mandated in any given jurisdiction. However, the financial institution that provides your auto loan or lease agreement will insist that you buy collision insurance<\/a>. You will also need to pay a deductible, so pick one that you can easily pay if you need to make a claim. In the event of a claim, the insurance company will pay out the actual cash value of the vehicle. If your car is damaged in a collision with something else, like another vehicle or a pole, collision insurance will pay for the repairs.\u00a0<\/p>

#5. Personal Injury Protection<\/span><\/h3>

If you or a passenger in your car are injured in a collision, personal injury protection (PIP) will pay for medical expenses. This insurance is unlike others because it pays out no matter who is at fault. PIP benefits are available regardless of fault for the accident. In addition, it safeguards you while you are walking. As a result, if you were walking or riding your bike and a car struck you, your PIP coverage might cover your medical expenses.<\/p>

But keep in mind that it is not accessible in every state. Only the following 12 states mandate PIP coverage:<\/p>