Types of Insurance Coverage
There many types of auto insurance coverage to choose from. It is very important to understand the different types of coverage in order to make sure you are properly protected. The following is a list and brief description of the main types of auto insurance coverage available.
Collision Coverage:
This type of coverage refers to your own vehicle. If you are involved in an accident which is your fault; or the at-fault party is not identified, your collision coverage will cover the damage to your vehicle. Most types of collision coverage include some sort of deductible. Your deductible is the amount of money that you will have to pay before your insurance company will pay out. For example, if the damage to your vehicle is $750 and you have a $500 deductible; you will have to pay $500 and your insurance company will pay the remaining $250.
Comprehensive Coverage:
Comprehensive coverage applies to non-accident related vehicle claims. Comprehensive coverage covers theft, acts of God, vandalism, and damage by animals. Just like collision coverage, there is a deductible attached to this type of coverage as well.
Property Damage:
Property damage coverage applies if you are at fault for an accident. Your property damage will cover the damage to any property resulting from an accident for which you are at fault. This could be the damage to another vehicle or a fixed piece of property like a guard rail. Limits of property damage range from $5K to millions of dollars. It is very important to have enough PD coverage. If you have $5K PD limits and you t-bone a Bentley, you’re going to be on the hook for a hefty bill.
Bodily Injury Liability:
This type of coverage applies to any harm or death caused to a person; resulting from an at fault accident. Aside from injuries, it also protects you from any lawsuits resulting from the injuries. Bodily injury liability will cover medical bills, loss of income, and pain and suffering. Make sure you have sufficient coverage to prevent anyone from coming after your personal assets.
Uninsured Motorist:
This coverage protects you in the event you are involved in an accident with an uninsured, at-fault motorist. It consists of Uninsured Motorist Bodily Injury and Uninsured Motorist Property Damage coverages, which take the place of the equivalent liability coverages of the uninsured motorist. Given the high rate of uninsured drivers, especially in urban areas, this coverage is a must to ensure complete protection.
This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.