Purchasing car insurance is always a good idea. After all, a car is the second biggest purchase we make in this life. It is reasonable to protect it just in case. There are five types of insurance for a car. The question is, which type should you choose? To help you decide, below we will give you a brief explanation of each type. Let’s start.
#1: Liability Insurance
This type of insurance covers an individual in case they are in a covered car and the accident is deemed to be the fault of that individual. This insurance will cover the cost of property damage and the medical expenses from injuries caused by the accident. In most states, drivers are obliged to have a certain amount of liability insurance.
While every driver has liability insurance, it is always a good idea to purchase more than your state’s minimum requirement. If you do so will have extra protection in case accident happens and you are deemed to be at fault. After all, when you are at fault you will be responsible for any claims that may exceed the limit of the coverage. Without extra protection, it will be very costly.
#2: Collision Coverage
This type of car insurance covers the expenses of the repair of an insured car in an event of an accident. If the total cost of repair is more than the value of the car, the insurance will cover the car’s value instead. Since the value of a car declines over time, this type of insurance is suitable for newer cars. For older cars, it is not worth purchasing.
#3: Comprehensive Coverage
Unlike the first two insurances, comprehensive coverage does not cover accident or damages related to an accident. Rather, it covers a car for non-accident-related situations. For instance, damage caused by the weather, the car is stolen or you hit a deer on the road. Comprehensive coverage covers these kinds of situations.
#4: Personal Injury Protection
Personal Injury Protection is an insurance that covers the expenses associated with an accident. Since these expenses can and do add up rapidly, you may want to consider this insurance. Not only will the insurance covers you, it will also cover the passengers inside your car regardless who is at fault for the accident.
#5: Uninsured/Underinsured Motorist Protection
Even when a driver has mandatory liability insurance, the coverage may be just in minimum level. As a result, when you are involved in an accident with an uninsured/underinsured driver with said driver at fault, you may not receive the coverage in full amount in case the damages exceed the driver’s coverage amount limit. This insurance protects you from this kind of situation.
As you can see, there are five types of car insurance. Since they cover different things, the first thing you need to do is to take your time and think about your situations. For instance, if you live in an area where the weather can damage your car you may want to consider the comprehensive coverage plan. Likewise, if you have a new car, collision coverage is a good option.