Car Insurance Coverage Options

The Broad Spectrum of Car Insurance Coverage Options

It’s a pretty simple rule of thumb:  If you have a car, and you want to drive it around town legally, you need to have a car insurance policy.  It doesn’t matter what state you live in; if you do not have insurance, you are breaking the law every time you climb behind the wheel and turn the ignition.  As such, it is obvious that you need to do a little research, figure out which insurance features the girl named Flo or the talking lizard with the British accent, and start shopping for a premium that will fit your needs.

Of course, if you have ever shopped for insurance before, you already know that the practice of obtaining the best property for your sensibilities is nowhere near that easy.  There are terms that you need to learn, like liability or deductable.  There are also various variables that factor into the determination of your policy’s price tag such as your age, gender, or marital status.  However, what may be most confusing aspect of obtaining car insurance is sifting through all the types of car insurance coverage options that are available to the consumer.  Indeed, there are plenty of options to choose from.    So much so, there’s a somewhat decent chance that you may get lost, confused, and accidentally purchase the wrong type of insurance if you have never bought insurance on your own before.

The Three Most Common Types of Insurance Options

In order to clear up the confusion about the various types of car insurance coverage that you can purchase, it would be wisest to initially hone in on the three most common insurance types:

  • Liability Coverage – This is the most common form of coverage, because it is the type of insurance that is required by law to have.  Essentially, this type of insurance protects you from any damage that you may cause to a person or property in the event of an accident.
  • Collision Coverage – This type of coverage enables your insurance carrier to pay for the damages done to your car in the event of a car accident.  This applies whether you are involved in a fender-bender with another vehicle or if you hit an inanimate object, such as a post or a pole.
  • Comprehensive Coverage – Also known as Other Than Collision (or OTC) coverage, this type of coverage will cover your car from physical damages that are not caused by a car crash.  Common types of incidents where this type of insurance come into play include theft, vandalism, damage from severe weather or natural disaster, or damage sustained by hitting a bird or animal.

Because these are the most common types of car insurance available on the market, there is a great wealth of information that exists online about them, thus making it pretty easy for you to become well versed in just how exactly they operate.

Other Types of Insurance

While there is no problem molding and shaping your insurance policy around the three most widely known coverage types, there are a few other insurance options that are worthwhile exploring.  While these types of car insurances are not essential, they do go a long way in providing extra layers of safety and security should you get involved in an auto-related accident or incident.

These other policies include:

  • Medical Payments Coverage – Also sometimes known as first party benefits, this type of coverage will assist you in taking care of medical expenses for anyone who was hurt in your vehicle during your accident.  This plan covers the injured parties regardless of who was at fault in the accident.  This coverage can also extend to a pedestrian if he or she happens to be injured by a vehicle involved in a wreck.
  • Uninsured/Underinsured Motorist Coverage – This type of coverage can assist in the payment of damage and medical costs that stem from an accident caused by a person that either has inadequate insurance coverage or no insurance coverage whatsoever.
  • Personal Injury Protection (PIP), aka No-fault Insurance – This type of coverage, which is only available in certain states, will pay medical expenses of the insured party regardless of who was as fault in the accident.  In some cases, other damages and lost wages resulting from the wreck could also be covered.
  • Basic Reparation Benefits – This type of coverage will help to retroactively cover medical expenses up to a specific amount.  Certain state also offer additional reparation benefits to extend the amount of retroactive coverage offered.
  • Work Loss Coverage – As the name implies, this coverage type assists the people on your policy and your passengers to recoup lost wages should they be rendered unable to work due to injuries related to a car crash.
  • Gap Insurance – This coverage is offered to provide protection for people who have financed or leased their vehicles.  In the event that your financed or leased car is deemed to be a total loss in the aftermath of an accident, the coverage will reimburse you the difference between the actual cash value of your vehicle at the time of the loss and the amount that is still owed to the finance company.  While gap insurance is typically offered by the car dealership at the time of car’s acquisition, it is usually cheaper to get it through an insurance dealer.  The only requirement to obtaining this service is that you have to have both collision coverage and comprehensive coverage.
  • Rental Car Reimbursement – This coverage will enable you rent a car if your vehicle is being repaired or is not drivable due to a covered accident.
  • Towing and Labor – This type of coverage provides emergency roadside services in the event of an accident.  This coverage is only available if you have either comprehensive coverage, collision coverage, or both.  It should be noted that independent, third-party companies like AAA also offer these kinds of roadside assistance programs.
  • Mechanical Breakdown – This kind of coverage offer repairs to your car’s mechanical parts in the event that they break.  This coverage applies even if the breakage did not stem from a car accident.
  • Accidental Medical Protection Plan – This type of coverage enables specific accident medical expenses to be paid directly to you without a deductable.  The specifications of what is covered vary from state to state.
  • Accidental Death Benefit – This coverage pays a death benefit should an accident cause the demise of you or a covered family member.

Obviously, these various plans give you plenty of things to mull over as you go on the hunt to shape the best plan for you and your needs.  However, they all serve as a reminder to one aspect of car insurance companies that oftentimes gets overlooked.  That is, a car insurance company’s primary function is to help and guide you through what could be one of the toughest, most traumatic appearances of your life.  And even though the notion of buying car insurance can sometimes be tough, when you look at an insurance company that way, they become a little less intimidating and a lot more vital to your everyday life.

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Different Types of Car Insurance