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The different types of auto insurance coverage

The different types of auto insurance coverage

You understand you need car insurance to protect yourself and your car from unexpected incidents but that’s about all you know. Often, we turn to insurance agents who start throwing out different terms that may have you thinking, “just tell me what I need and I’ll do it.” Instead of putting all of your faith in your agent, take a moment to become familiar with the main types of coverage you may want.

Thomas Dixon
Finance
Aug 27, 2021

Table of Contents

You understand you need car insurance to protect yourself and your car from unexpected incidents but that’s about all you know. Often, we turn to insurance agents who start throwing out different terms that may have you thinking, “just tell me what I need and I’ll do it.” Instead of putting all of your faith in your agent, take a moment to become familiar with the main types of coverage you may want.

Types of insurance deductibles available

Car insurance policy coverage consists of several different covers. Some cover property liability and fund the other party for damages and injuries if you cause an accident. But the different ranges, such as personal injuries protection, motorist property damage, uninsured, collision coverage, and comprehensive insurance policy, exist to cover injuries of those in the car and the car damages. Most of these contain deductibles while others give options to include deductibles and minimize coverage costs.

The following are examples of surfaces that have deductibles:

  • Comprehensive insurance
  • Collision coverage
  • Property damage liability
  • Personal Injury protection coverage

Comprehensive insurance policy

In an accident where your car is damaged, comprehensive insurance is crucial in adding protection to your vehicle. Comprehensive insurance enables you to cover your vehicle for casualties such as theft, falling objects, and weather. For instance, striking an animal will not be included in the collision insurance but the comprehensive insurance will take care of it. Comprehensive insurance offers explicit coverage for anything that damages your vehicle apart from a typical auto accident. Comprehensive insurance will come to your aid in case of any casualties. The types of losses covered by insurance companies vary.

What does comprehensive insurance cover?

First, you need to be aware that comprehensive insurance does not cover rollovers and collisions. Damages resulting from these incidents will need collision or liability covers.

After an accident, comprehensive insurance covers any other casualties in your vehicle or something else worth attention. The following types of losses are covered by comprehensive insurance:

  • Fire: Wildfires may damage your car when you are in the community.
  • Floods: Too much rainfall may cause rising water levels above the car’s clearance hence becoming sopping wet.
  • Wind: Strong wings may break trees and carry large particles that fall on your car, damaging it.
  • Theft: A thief may steal the whole car or break the car’s windows and steal an appliance.
  • Hail: Hails may result in cracks on the windshields and dents on the car’s roof.
  • Vandalism: Somebody may slash your car’s tires in the night just for fun.
  • Hitting animal(s): You may accidentally hit an animal, for instance, hitting a deer, hence damaging the hood and front bumper of the car.
  • Falling objects: An item may fall from anywhere and hits your car hence damaging it.

As seen from the above casualties, comprehensive covers a wide range of things that may damage your car; hence, many people prefer it.

Factors affecting comprehensive insurance premiums

Several factors determine your annual premiums when going for comprehensive insurance. Such factors include the driver’s gender, age and marital status, driving history, number of filed claims, car model and age, and credit history. Therefore, before dropping the comprehensive coverage from your policy, ask yourself the following:

  • Are there a lot of wildfire cases in your region?
  • Is the crime rate high in your region?
  • According to FEMA, is your area a flood zone?
  • Are there a lot of mail cases on your part?

Collision coverage policy

Collision coverage is an additional cover provided by a lot of auto insurance companies. Having collision coverage means that your vehicle will be repaired or replaced if it is damaged after colliding with other cars or hitting objects. This is advantageous in an at-fault accident. Usually, at-fault driver’s car damage coverage aids in repairing the other party’s car. Collision insurance can also offer help, especially when the fault was not yours during the accident.

What does collision insurance cover?

The collision cover is designed to offer protection to your vehicle. It helps you fund replacement of or repairs to your vehicle in case of damages when it collides with an object or another car. For instance, when you strike and damage your car’s bumper and tires, the collision insurance cover applies even if you were at fault. Besides the previous scenario, collision insurance also covers casualties from:

  • Accidents with other vehicles.
  • Hitting your truck into a tree, mailbox, or fence.
  • Crushing into road signposts or guardrails.
  • What is not covered by collision insurance cover.
  • Damage caused by vandalism or theft.
  • Damage caused when an animal runs into your car.
  • When your car is burnt.
  • Damages caused by natural disasters such as hailstones and floods.

Uninsured property damage policy

This type of insurance cover protects the driver when the vehicle is involved in an accident where the one at fault is not insured. For instance, when you are interested in an accident, the other party at fault is not guaranteed. You will only have to take care of the damages caused by the other party. Uninsured insurance coverage comes to your aid when such scenarios occur.

Types of uninsured coverage

There are two uninsured coverage types. These are uninsured motorist bodily injury coverage and uninsured motorist property damage coverage.

Uninsured motorist bodily injury coverage covers you and your passengers if injured in an accident with an uninsured driver. This type of coverage would cater to the doctor, hospital bills, and lost wages if your injuries were severe and you are unable to work for an extended period.

On the other hand, uninsured motorist property damage coverage is a section of your uninsured that covers your vehicle if it is damaged after an accident with a driver who is not insured.

Reasons why you may need uninsured coverage:

  • There is a higher risk of being involved in an accident where the at-fault driver is not insured.
  • You must have uninsured coverage for you to lease and finance your car.
  • About half of the world’s countries require their driver to have uninsured coverage.

Personal injury protection cover

This is an auto insurance policy that covers you and your passengers in case of injuries after an accident. Personal injury coverage works regardless of who is at fault in the accident.

Personal injury coverage covers hospital bills or medical bills such as ambulance care, nursing care, X-rays, rehabilitation, surgical costs, and much more. It also offers protection if you lose your job due to your accident. It even provides you with someone to help with household chores if you cannot handle them after an accident.

This insurance coverage does not take care of your damaged vehicle and doesn’t cover compensation for suffering and pain.

Your deductible

A deductible is the amount of money you owe in an event covering auto insurance claims. There are several distinct coverages containing deductibles and the ranges consist of many different deductible options. Therefore, when choosing the best car insurance companies an insurance deductible involves personal preference, choice, and budget. An insurance deductible is the number of funds you have agreed to cash out from your pocket for your car’s replacement and repairs in case it is damaged after an accident. For instance, if you are involved in an accident, and the damages amount to about $6,000, and you have a $1,000 deductible, you will pay the $1,000 and the insurance company will be responsible for the remaining $5,000.

Your insurance deductible will be determined by your insurance agent and career before completing the insurance policy. You should always have options to change deductibles at any given time when in need so you can keep your insurance affordable. When it comes to premiums, you can lower your monthly payments by adjusting how much you choose as a deductible — the higher your deductible, the less you’ll pay. To find the best rates, be sure to get multiple quotes from car insurance companies, or try a free comparison tool for multiple quotes at once.CarInsurance.net can help you see different coverage types, deductibles and monthly premiums to help you decide.

Rose Rosie is a writer for the personal finance website, Joy Wallet, which provides readers with useful information, resources, and tools to help maximize their financial fitness.

Thomas Dixon | He creates the ideal marketing experience by connecting online brands with their target audiences. He recently completed a research paper on consumer conversion and took part in a community project on SEO optimization. Thomas is working on his Bachelor of Arts in Communications and plans to intern in an online marketing department soon.

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