What Are The Different Types of Car Insurance?
Auto insurance helps you stay protected in case you’re in an accident or something happens to your car. If you’re shopping for auto coverage, knowing the different types of auto insurance and their coverages is an important step in getting the policy that’s right for you. Here are a few of the basic car insurance types, how they work and what they cover.
Liability coverage
Liability insurance may help cover damages for injuries and property damage to others for which you become legally responsible resulting from a covered accident.
Collision insurance
Pays for damage done to your car if you hit another vehicle or object. For example, if you back into a tree, this coverage can help pay for the damages to your car. Collision insurance is not required by state laws, but your lender may require that you purchase this coverage. In a covered accident, you are responsible for the amount of deductible you select on this coverage.
Comprehensive insurance
Pays to repair damage to your car from things like:
- Natural disasters
- Theft
- Vandalism
- Collision with an animal
For example, if a tree branch fell on your car during a storm and caused damage, comprehensive coverage, often called “other than collision coverage,” can help pay the cost of repairs. Just like collision coverage, comprehensive insurance is not state required, but your lender may require you to have it. In a covered accident, you are responsible for the amount of deductible you select on this coverage.
Uninsured/underinsured motorist insurance
Uninsured/underinsured motorist coverage helps cover damages if you are hit by a driver who doesn’t have car insurance or doesn’t have enough car insurance to cover the costs of damages and injuries.
Many drivers choose to carry the minimum in liability coverage to save money, but this might not provide enough coverage. Underinsured motorist insurance can protect you in the event of an accident with a driver whose insurance is not enough to cover the costs.
Personal injury protection insurance
Also know as PIP insurance, helps pay for losses related to injuries from a car accident, no matter who was at fault. In addition to medical bills, personal injury protection (PIP) can also help cover funeral costs or lost wages. On July, 2 2020 the auto reform in Michigan now allows drivers to select the amount of PIP coverage they want on their car insurance. Read more about auto reform.
Gap insurance
Gap insurance can help pay the difference between your car’s actual cash value and the amount you owe on your car loan if it’s stolen or totaled. Car value can depreciate quickly, so an auto insurance settlement might not be enough to cover the cost of a loan. This type of coverage is not mandated by state law, but if you have a car loan, gap insurance may be a coverage requirement from your lender.
Towing and labor insurance
Helps to pay towing and labor charges associated with getting your vehicle running again in the event of a breakdown. For example, if your car battery dies on the interstate, this coverage can help pay for the costs of having your car jump-started.
Rental reimbursement insurance
Figuring out how to get around after an accident can be expensive. Rental reimbursement insurance helps pay for a rental car if your vehicle cannot be driven after an accident.
Classic car insurance
Classic car insurance provides specialized coverage designed for the unique needs of vintage and classic car collectors.
We can give you a quote for any of these coverages for your car, truck or RV today. Get a quote now!
