Different Types of Car Insurance Coverage

A car insurance policy provides different types of coverage. In order to make sure that you get the best value for your money, it is very important for you to know which type of coverage you need. Always remember, the more coverage your policy includes, the higher would be the amount you have to pay as premium. Therefore, be very careful about what you choose. Following is a brief rundown on the different options available to you in car insurance coverage.

Liability Coverage
If you are determined at fault in an auto accident, you may be liable to pay for the property damage and personal injuries caused to the other parties. The liability coverage provides you monetary protection in such cases. It means, your insurance company will pay the compensation, not you – but only up to the amount as specified in your car insurance policy document. In most states of America, it is legally mandatory for you to opt for a specified minimum amount of liability coverage, including both bodily injury liability and property damage liability.

Comprehensive Coverage
The comprehensive coverage in your car insurance policy provides you protection for any type of loss that is not caused by an auto accident. For example, it may include damage caused by extreme weather conditions or other natural calamities, such as fire, flood, earthquake, hail storms, hurricanes, and tornadoes. This type of car insurance coverage also protects you in case your car is vandalized or stolen. You will also be covered if the car gets damaged because a heavy object falls on it. The insurance company will be liable to pay the compensation for such repairs.

Collision Coverage
Collision coverage, as the name clearly suggests, provides you monetary protection when your car gets damaged because of a collision with something else. This can be anything, including a guardrail, a tree, a building, another vehicle, or any other stationary object. In some of the car insurance policies, collision coverage also pays for the repairs in case your vehicle suffers a damage or loss while running over potholes. In case of damage, the insurance company will pay for the repairs, but in case of total loss, they may even have to provide you a replacement. However, here, it is important for you to keep in mind that car insurance companies will pay the current value of money in reimbursement, not the price you had actually bought the vehicle for.

Underinsured Driver Coverage
This type of car insurance coverage is commonly also referred to as underinsured motorist coverage. It can be very helpful in case you are involved in an auto accident where another party is determined at fault. But, the driver does not have proper car insurance to cover all your losses – they may just have the legal minimum amount of liability insurance. In such cases, your insurance company will pay you for the difference.

There can be several other types of coverage as well that may include gap insurance, pay-per-mile coverage, rental car insurance , physical damage coverage, personal injury protection, and even fire and theft coverage.

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