If you’re getting car insurance, you might be a little overwhelmed by all the choices you have to make. Sure, you might just want the entire ordeal to be over with. You might be tempted to be haphazard about choosing your coverages. But it’s important to know how each of these coverages protects you (believe it or not, these coverages are more than just money flying out of your wallet.) Here are 6 car insurance coverages explained in simple, bite-sized pieces.
6 car insurance coverages explained
Auto liability insurance:
Auto liability insurance is required by law – how much insurance you must carry is determined by your state’s laws. This is the insurance you need to be able to drive your car legally on the road.
There are two main parts of liability insurance:
Bodily injury liability insurance can help you cover your legal obligations to another driver and their passengers if you’re at fault in a car accident. It covers expenses and claims such as their medical bills, their lost wages, and their pain and suffering. It can help you if the injured party decides to sue you.
Property damage liability insurance can help you pay to repair or replace another driver’s car if you damage it (or other property) in an accident.
Collision coverage can help you pay to repair or replace your own vehicle if you’re in an accident (or otherwise have a collision.) Liability insurance will not pay to help you repair your car if you’re at fault in an accident – it will only cover the other driver. So, if you want insurance to cover repairs to your own vehicle, you would need collision coverage.
Comprehensive coverage can help you repair or replace your car if it’s damaged by something other than an accident or collision. For example, it can cover things like lightning strikes, vandalism, falling objects (like trees that squash your car into a pancake), animal strikes, and fire. It can also cover you if your car is stolen. (Again, liability insurance will not help you repair or replace your car in the event of these types of losses.)
While collision insurance and comprehensive insurance may not be required by your state, your lender or lienholder may require you to carry these car insurance coverages if you have a car payment for a loan.
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Medical payments coverage:
Medical payments coverage can help cover your medical expenses and those of your passengers if you’re injured in a car accident – it’s a no-fault coverage.
UM/UIM coverage (Uninsured/Underinsured Motorist coverage):
Uninsured/Underinsured Motorist coverage can help reimburse you if you are hit by another driver who doesn’t have insurance or who doesn’t have enough insurance to cover the total loss of the claim. (It can also help if you’re struck by a hit-and-run driver.) It can help you cover your medical expenses. Though liability insurance is required by law, not all drivers abide by it – some people simply don’t have insurance. Others only have the minimum level of car insurance required by the state, and that might not be enough to cover all the expenses that result from an accident or cover their legal obligation to you.
Rental reimbursement coverage:
Rental reimbursement coverage can help you cover the cost of getting a rental car if you’re in an accident and your own car needs to spend some time in the shop being repaired. It’s usually an inexpensive coverage that you can add to your car insurance policy, and it could come in handy if you ever find yourself with your car in the shop following an accident.
So, those are some car insurance coverages that you can consider for your vehicle. (Well, you’ll have to get liability insurance because it’s required by law. That’s non-negotiable.) But otherwise, that’s a quick rundown of some of the other options that you can get to protect yourself and your vehicle. A car is a big investment, so it’s important to make sure that you have enough insurance to fully protect yourself in the event of a loss or an accident. And that’s why it’s important to be familiar with the different types of car insurance.
If you’re looking for car insurance quotes, we can help. Our agents will talk with you about your insurance needs and help you get the car insurance coverages that are right for you. And getting started with your quotes is easy – all you have to do is fill out our online quote form or give us a call today. We’re here to help with your car insurance needs.