Types of Car Insurance Coverage

Car Insurance

Types of Car Insurance Coverage Car Insurance Explained

Car insurance can be confusing. You know you should have it, but what kind do you need? There are many different types and not every driver needs every kind. Read this breakdown of the various types of coverage to find out what they all mean and which ones you should be including in your policy.

Liability Insurance Liability insurance is meant to cover you if you are found to be at fault for a covered accident. This will pay for the costs of property damage caused by the accident and the medical bills from any of the other driver’s (and any passengers’) resulting injuries.

Most states require drivers to carry liability insurance (the amount varies by state). However, even though there is a minimum, it is a good idea to get more than the minimal coverage, especially if you have a newer vehicle. This way you’ll have added protection in case you have a claim that exceeds the limit of your coverage.

Collision Coverage This kind of coverage pays for repairs to your own car if you have a covered accident. If the cost to repair your car exceeds the value of the vehicle, collision coverage will pay the value of your car.

Therefore, if you have an old car, you may not need collision coverage. If your car isn’t valued at much, it may not be worth it.

It’s important to note that if you have a lienholder, you are required to have this coverage.

Comprehensive Coverage Comprehensive coverage covers events that aren’t related to covered car accidents. This coverage can be expensive, but it can save you from having to pay to replace your vehicle. Examples of situations that may cause you to need comprehensive coverage include: Your car is stolen or vandalized.

Your car is affected by fire or a flood.

You hit an animal with your car.

Like collision coverage, this coverage is required if you have a lienholder.

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