Auto insurance can be a huge boon when you get into an accident. But, for the insurance plan to benefit you, you need to have adequate coverage. So, before you start comparison shopping for an auto insurance plan, here are the various coverage options you need to be aware of.
Liability Insurance
Liability insurance is the most basic type of auto insurance. Most states will require you to mandatorily have liability insurance if you are a car owner. In case you happen to meet with an accident, this is the coverage that will pay for the other party’s medical expenses and/or property damage. You may also hear this coverage option referred to as “minimum auto insurance” or “liability only insurance” by insurance companies.
Comprehensive and Collision Coverage
Comprehensive and Collision Coverage are usually bought together. Comprehensive coverage compensates you for your loss if your car is stolen or pays for damages if your car has been damaged, provided it is not due to a collision. Collision coverage pays for damages if your car has hit another vehicle or object or was hit by a hit-and-run driver.
Medical Payments Coverage
This is an optional insurance plan that will help pay for things like hospital expenses, medical expenses, and funeral expenses, in case of an accident regardless of who was at fault.
Personal Injury Protection (PIP)
PIP offers coverage for hospital, medical, and funeral expenses, as well, in case of an accident. Certain states require auto insurance policy buyers to mandatorily get PIP coverage, while other states consider it optional insurance. Keep in mind that PIP insurance is not available in all states.
Uninsured Motorist Coverage
Uninsured Motorist Coverage will pay for expenses if you happen to meet with an accident in which the at-fault driver cannot be identified, you don’t have sufficient liability insurance to cover the claim, or you don’t have any liability insurance.
Rental Reimbursement Coverage
Renting a car is not always inexpensive. Rental reimbursement coverage reimburses you for the cost of renting a car if you cannot drive your car due to an accident or other covered loss.
While these are some of the most popular kinds of car insurance coverage offered by most auto insurers, you could also get additional riders to customize your coverage.
