How Different Types of Auto Insurance Coverages Work

By | September 4, 2014

If you own a car, you already know how important is car insurance. You may have heard the words deductible or premium. But, do you truly understand the different parts of an auto insurance policy and do you know how to choose the best coverage.

Before purchasing a car insurance package, you need to consider a variety of factors, including what kind of car you have and the amount of money you are willing to pay, etc. Understanding the basics concepts of car insurance will make you to choose a car insurance policy that prove useful in the event of an accident. In this article, we’ll discuss different types of car insurance coverages.

Different types of car insurance coverage
Everyone who own a car require a car insurance. Your car insurance policy is based on variety of factors including what kind of car you drive as well as what kind of insurance you want. Auto insurance policies are actually a package of different types of insurance coverage.
Now let us discuss some of the insurance coverage policies briefly:

  • Liability insurance coverage
    • This type of insurance coverage is paid for accidental body injury and damages of property to others.
    • Insurance coverage paid for injury damages includes medical expenses, pain and suffering and lost wages due to accident.
    • Property damage includes damaged property and automobiles.
    • This insurance coverage also pays even court costs.
    • The state laws determine how much liability insurance coverage you must purchase.
  • Collision insurance coverage
    • This type of insurance coverage is paid for damage of your vehicle caused by collision with another vehicle or any other object.
  • Comprehensive insurance coverage
    • This type of insurance coverage is paid for a loss or damage to the insured vehicle that doesn’t meet with in an accident.
    • The types of damages insurance covers include loss caused by fire, wind, flood, theft, etc.
  • Medical insurance coverage
    • This type of insurance coverage is paid for medical expenses irrespective of fault the expenses are caused by an auto accident.
  • Personal injury protection insurance coverage
    • Personal Injury Protection (PIP) insurance coverage is required in some places.
    • This coverage pays medical expenses for the insured driver, regardless of fault, for treatment expenses due to an accident.
  • Under insured motorist insurance coverage
    • This type of insurance coverage is paid for car’s damages when an auto accident occurred by someone who has insufficient liability insurance coverage.
  • Rental reimbursement coverage
    • This type of insurance coverage will be paid for rental car.
    • If your car is damaged due to an accident. Generally, this coverage has a daily allowance to be paid for a rental car.

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