There are different types of Auto Insurance out there that you can choose for your car no matter how expensive it might be. With the right insurance coverage, you can typically secure your car without having to worry about spending so much on it when the unexpected happens such as an accident and other physical types of damages.
The insurance that we're going to discuss in these articles is either mandatory or optional, but they all play well when you get them for your vehicle.
I believe you already know that an auto insurance policy is a form of protection for your vehicle right? This protection covers you against any form of financial loss just in case your vehicle gets into any form of accident.
The six insurance I'm going to discuss cover some states while others do not. This is why you see some of them being mandatory and others being optional.
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What Are The Six Types Of Auto Insurance Coverages ( Auto Insurance Coverage Explained)
There are 6 different major insurance coverage for cars. Below are the six major types of car insurance coverage
- Property Damage Liability (PD)
- Comprehensive Insurance Coverage
- Medical Payments or Personal Injury Protection (PIP) Insurance Coverage
- Collision Insurance Coverage
- Bodily Injury Liability (BI)
- Underinsured/Uninsured Motorist
Property Damage Liability Insurance Coverage
Property Damage Liability Insurance Coverage is a type of coverage that is designed to cover you in the case of an accident in which you are the one at fault. This insurance coverage covers the entire repairs of the other driver's car you collided with during the time of the accident, or any property you destroy as a result of the accident.
Comprehensive Insurance Coverage
Comprehensive insurance coverage is another great insurance that covers the reimbursement for your loss as a policyholder. This coverage reimburses for your loss or damage caused to your vehicle by something other than a collision. Let's say, for example, your car got damaged as a result of your vehicle bursting into flame from the engine as a result of a faulty engine, damage from hail and other falling objects, or damage caused by animals.
Medical Payments or Personal Injury Protection (PIP) Insurance Coverage
Medical Payments or Personal Injury Protection (PIP) Insurance Coverage is an insurance coverage that allows you or any of your passengers in your vehicle to get access to medical treatment as a result of an accident them getting hurt in your vehicle when an accident occurs.
This insurance coverage is known to cover medical payments or personal injury protection which can really come in handy when it comes to taking care of hospital bills.
One interesting thing about this coverage is the fact that it can also cover any lost wages if you or an injured passenger are unable to work or funeral expenses if someone in your vehicle dies because of an accident.
Collision Insurance Coverage
As the name implies, Collision Insurance Coverage covers the payment for damage made to your own vehicle or property.
These damages include damages caused by a collision with another vehicle or hitting a stationary object, such as a tree or fence. Unlike the property damage liability insurance coverage that covers the payment for damages made on someone else's vehicle or property following an accident.
Don't get confused between the two. It can be confusing though.
Bodily Injury Liability (BI)
BI which stands for Bodily Injury Liability Insurance Is an insurance coverage that is strictly designed to cover the payment of medical expenses for someone else if they get injured as a result of an accident caused by you.
This coverage does not apply just to you alone, it also covers anyone you list as a driver on your insurance policy.
Underinsured/Uninsured Motorist
Underinsured/Uninsured Motorist coverage takes care of your personal protection just in case you're into an accident where the driver is the one at fault and doesn't have sufficient insurance.
With uninsured motorist coverage, you are meant to enjoy protection when you get into an accident with a driver who has no insurance at all.
How and Why Insurance Coverage Vary By State ( Understanding Insurance Coverage By State)
In the United State Of America, every state but New Hampshire requires you to get these two types of insurance coverage (bodily injury liability and property damage liability coverage).
In New Hampshire, as a driver, you do have to meet certain financial responsibilities and requirements in other to forgo liability coverage.
Besides that, every other state has its minimum dollar amount for coverage. Bodily injury liability can have two dollar limits: one per person and another per accident, while there's only one limit for property damage.
Coverage limits are typically expressed in your insurance policy by a sequence of numbers. So, for example, if your policy has a $25,000 bodily injury liability limit per person, a $50,000 bodily injury liability limit per accident, and a $25,000 property damage liability limit, your policy would express it as 25/50/25.
It's important to note that the minimum coverage limits are just that—minimums. You can opt to purchase coverage above those limits, and that's often a smart idea.
Whether you're legally required to carry medical payments/PIP insurance, collision coverage, comprehensive coverage, or underinsured/uninsured motorist coverage depends on your state. And again, the minimum coverage amounts you're required to have for each one can vary.
Conclusion
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