Small repair work in a new car can burn a hole in your pocket. This is why car insurance is a must-have policy for any vehicle owner. What’s more, driving without insurance is illegal in many states all over the world.
Choosing car insurance may seem like an overwhelming experience at first, considering the different types of auto insurance policies being offered nowadays. But today, we are going to make things easier for you by discussing some of the basic types of insurance policies for car owners. The best policy should cover the vehicle-specific, driving conditions-specific, driver-specific, and third-party-specific needs. You can also customize the insurance plan by adding and subtracting features.
Here are 5 different types of car insurance coverages to choose from. Find one that suits your vehicle and your budget and can also save you some money while providing all the necessary features:
1- Liability insurance
Liability insurance covers you in the case when you are involved in a car accident, and it is reported that the accident was caused as a result of your actions. Liability insurance covers the cost of repairing any harmed property as well as, provides medical bills for all resulting injuries.
In many states, liability insurance is the minimum requirement of coverage for all car owners. However, we recommend you to invest in liability insurance which provides more than the minimum liability coverage requirement. The extra cushion will save you in the case of an accident which occurred due to your mistake. After all, you don’t want to run the risk of paying a large sum of money from your pocket because your policy limit provides a bare minimum amount.
Some of the main features of a liability insurance plan are:
- Covers the repair cost of the damaged property of a third party
- Covers the medical bills of the third party, in case of hospitalization or medical treatment.
- All vehicle owners are required to buy the minimum liability insurance as per as per the motor vehicle Act 1988.
2- Collision Insurance
One of the most significant shortcomings of liability insurance is that in case of an accident, you may have to pay for the repairing costs of your own vehicle. This is when collision insurance comes in handy. A collision insurance policy makes sure that your insurer pays for the repairs of your car. So much so, if your car is completely totaled in an accident, collision insurance will pay for the value of the car. If you don’t have collision insurance, you might just have to scrap my car for cash after a bad accident.
Collision insurance is not mandatory to buy, but if you own an expensive car or a relatively newer model, we recommend you buy collision insurance as it can help you sleep much better at night.
3- Comprehensive insurance
While liability and collision insurances are designed to cover car accidents, comprehensive insurance protects your car against other elements like weather damage, theft, animal collision, etc. In short, comprehensive insurance covers just about any situation that might cause damage to your precious car.
A comprehensive insurance policy is the best one to have. However, the downside of this type of insurance is that it is a little pricey and it can be potentially easier for you to replace your car in the long run. Instead of getting a hefty comprehensive insurance plan, you can prevent theft incidences by getting an anti-theft and tracking device installed in your car.
4- Personal injury protection
If a comprehensive insurance plan is a bit too expensive for your liking, you can invest your hard earned money in a personal injury protection plan. As the name suggests, this insurance is designed to cover all the medical bills of you or your passengers in case of an accident, no matter who is at fault for the accident.
However, if you have a good health insurance plan, you can skip this one too.
5- Uninsured /Underinsured Motorist Protection
Many states have made it mandatory for all drivers to be insured. However, that is not always the case. Many drivers go around with absolutely no insurance, while others may have the minimum liability insurance which only covers the minimum requirements. So, in this case, if someone is legally responsible for the damages to your car (or body), you won’t receive any payment. This is when an uninsured and underinsured motorist protection plan can save you thousands of dollars.
The best part about this particular insurance plan is that it is relatively inexpensive to add uninsured/underinsured motorist protection to your existing car insurance policy.
Driving a car with 100% safety is not an easy feat. Car owners should realize the importance of choosing a beneficial car insurance plan. While the mandatory liability insurance is the cheapest option you can buy for yourself (and your car), it does not cover the policy holder’s interests. Hence, you should invest in auto insurance that suits the make and model of your car and your budget too!
Have you thought about the best type of auto insurance coverage for your car? Share the pros and cons of your auto insurance plan with us in the comments below and help fellow car owners pick the best plan for themselves.
Michelle Joe is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences, and express herself through her blogs