Car Insurance 101: 5 Types of Car Insurance Explained

Car Insurance 101: 5 Types of Car Insurance Explained

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Car insurance can seem easy until an agent starts asking questions that you do not understand. When you work with friendly and professional insurance agents, such as the ones you would find with an agency like Steers Insurance Limited, you will find patient people who are willing to explain the various kinds of car insurance coverage to you. But it is always in the best interests of a consumer to do research and understand car insurance coverage concepts before shopping for insurance.

PIP (Personal Injury Protection)

If you are ever in a car accident, you may be frustrated to find out that your health insurance does not cover many of the medical costs you will incur. That is why you need to have personal injury projection coverage, also known as PIP coverage, to help pay the medical bills and even cover your lost income while you are recovering from an accident.

Uninsured Motorist Coverage

Your state may have laws that mandate that each registered vehicle have auto insurance coverage that meets the state’s minimum guidelines. Unfortunately, not everyone follows the law and you could be in for serious financial stress if you get into an accident with someone who has no auto insurance coverage. With uninsured motorist coverage, your insurance company will help cover the expenses from your accident.

A component of uninsured motorist coverage is under-insured motorist coverage that will help to make up the difference between the state minimum levels and the actual costs associated with your accident. This is especially helpful in states where the minimum coverage requirements are extremely low.

Liability Protection

If you are involved in an auto accident and it is determined that you are at fault, then you will be liable for the costs associated with the accident. Not only does this include property damage and medical costs for the other party, but it also includes any other property damage and medical costs for situations such as damage to a road sign or injuries sustained by a pedestrian.

Liability protection will cover those costs for you and help you to take care of your financial obligations. It is always a good idea to have as much liability protection as you can afford.

Collision

The collision portion of an auto insurance policy pays to have your car repaired or replaced if you are involved in an accident. If your car is older, then it may not be worth the cost to carry collision insurance because most insurance companies will not pay repair costs that exceed the value of the vehicle.

Comprehensive (Comp)

Comprehensive coverage takes care of issues such as theft or damage caused by a falling branch. Talk to your insurance agent about ways to lower your comprehensive coverage costs, such as installing a car alarm to deter theft.

When you break it down into its component parts, car insurance is not really that complicated. By understanding what the different coverage options are, you can get the kind of insurance you need for your situation.

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