Types of auto coverages to consider before purchasing auto insurance.
Insurance is just like a helping hand that holds our back when we are in mid of a critical situation. There are many types of coverages that many insurance companies offer under their policies and plan. Various plan has various coverages that vary according to the nature of loss, damage or injury. Here are some types of auto coverages that an auto insurance company provides under their plan.
Liability insurance. This is a requirement in most states and is the basis of auto insurance policies. Liability coverage pays the third party for fault accidence, including injuries and property damage. Note that liability insurance does not cover any damage to your own car.
Collision insurance. Pays for damage to your car if you hit something,
such as another car, pole, etc.
Comprehensive insurance. Pays if your car is stolen or broken into. It
also covers damage to your car if you hit an animal or if you have
damage from flood, fire, hail, vandalism, or falling objects (such as a
tree branch).
Uninsured motorist (UM) insurance. If you're injured by a driver who has no liability insurance, this coverage pays medical bills. In some
states you can also buy a version that covers car damage from an
uninsured motorist.
Personal injury protection (PIP) and medical payments (MedPay)
coverage. These covers for injuries of you and your passengers, no matter who was at fault. Some states require PIP, where it is
sometimes called "no-fault insurance."
Rental reimbursement insurance. If your car is in the shop due to an accident covered by your policy, this helps pay for a rental car. It
typically has a daily and total maximum that it will pay.
How much auto insurance do you want?
Before you set out to compare car insurance, have an idea of what levels of coverage you want. Your state will decide the minimum you must buy. State requirements can include liability insurance, uninsured motorist coverage, and personal injury protection (called PIP or no-fault). You may want higher coverage levels for each than what's required. Here are examples of levels of coverage for liability and uninsured/underinsured motorist coverage. Your own car insurance needs often depend on how many assets you would have at risk in a lawsuit against you after a car crash. It also depends on whether you want insurance that will pay out for damage such as hail, hitting a fence, or having your car stolen.
Highest level
• $250,000 per person/ $500,000 per accident bodily injury liability
• $100,000 property damage liability
• $250,000 per person/ $500,000 per accident uninsured/underinsured motorist.
Typical level
• $100,000 per person/ $300,000 per accident bodily injury liability
• $50,000 property damage liability
• $100,000 per person/ $300,000 per accident uninsured/underinsured motorist.
Lower level
• $50,000 per person/ $100,000 per accident bodily injury liability
• $25,000 property damage liability
• $50,000 per person/ $100,000 per accident uninsured/underinsured motorist.
Minimum level (state requirements might be higher)
• $15,000 per person / $30,000 per accident bodily injury liability
• $5,000 property damage liability
• $15,000 per person/ $30,000 per accident uninsured/underinsured motorist.
What's full coverage car insurance?
You may have heard the term "full coverage car insurance." It
generally refers to a policy that has liability, collision and
comprehensive coverage. That gives you insurance for damage and
injuries you cause others (liability), and damage to your own car and
theft (collision and comprehensive).
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