June 17, 2013
Understanding the Different Kinds of Car Insurance Coverages
By Bethany Collins
Auto insurance has a reputation of being confusing. There’s just so much information out there, that it’s no wonder that people find the concept of auto insurance confusing and, let’s be honest, intimidating. But take a step back and think for a second. What’s the first step towards buying car insurance that will best suit your needs? Understanding the different kinds of coverage there are. This article is going to simplify the most common kinds of auto insurance coverage offered by companies across the country.
Liability insurance is the most basic form of coverage required by every state in the country. States require you to carry a minimum amount of liability insurance, but it’s usually a good idea to go beyond that the minimum requirement to make payments. At the time of a crash, if the police determine that the accident is your fault, your liability insurance kicks in. It will cover the cost of repairing property and car damage in the crash, as well as medical bills from injuries.
Unlike with liability that only pays for damages caused to the OTHER vehicle at the time of an accident, collision pays for damages caused to your own vehicle. If your car is totaled in a collision, this coverage will pay the value of your vehicle at the time of the accident. If you own a car that is over 10 years old, you might want to consider dropping collision altogether, because the amount you end up paying for this coverage might actually exceed the overall cost of your car.
What if your car was damaged by water damage or hail or theft? If you don’t carry comprehensive insurance, your car insurance will not pay for these damages. If you carry comprehensive insurance, your insurer will pay for damages caused by theft, rain, hail, storm, riot, animal collision, natural elements etc.
While carrying basic insurance is mandated by law, not everyone chooses to abide by it. There’s always a chance of you getting hit by someone who doesn’t carry insurance. In such a scenario, your uninsured motorist insurance will kick in. This coverage pays for bodily injury or death expenses for you and/or any passengers in your vehicle up to policy limits.
Sometimes the costs of treating injuries after a car accident can be pretty huge. Personal-injury protection covers the medical bills of you and any injured passenger in your car at the time of the accident. However, if you have a good health insurance plan, you might want to skip buying this coverage altogether.
If you are still making payments on your car, buying gap insurance might be a good idea. If you still owe money on a car and need to pay off the vehicle if it is totaled in an accident, carrying gap insurance is the way to go. If you owe more on your car than you can easily pay off on short notice, you’ll be glad for gap insurance.
These are just a few examples of the most common auto insurance coverage s offered by companies. Before shopping for quotes, do your research well about car insurance and the kind of coverage you’d like to carry on it.
Bethany Collins is a mother of two who works from home and lives with her husband. She is voracious reader and always looks out for happening topics related to personal finance. She specializes on subjects related to car insurance and uses her spare time to write on topics related to auto insurance, car insurance and etc.
Article Source: http://EzineArticles.com/?expert=Bethany_Collins