Purchasing car insurance may seem like an overwhelming task but in just a short time, it is easy to learn the basic car insurance categories and why they are important. There are three main types of insurance that will cover most consumers that are using a vehicle solely for personal use. Liability, comprehensive and collision insurance are the areas that will be included in most car insurance policies.
Liability Insurance
Liability Insurance covers the damage that a driver may cause. There are three subcategories to the main liability category. The first is Property Damage Liability which covers any damage that is done to another person’s property. This would include damage to another vehicle or to other property such a fence or house. Second is Bodily Injury Liability which covers any injuries or death that may be caused by the insured. The coverage would be used to pay medical bills, hospital bills or funeral expenses that were incurred due to injury or death that you caused with your vehicle. Both of these forms of insurance cover other people or their property that is damaged. The final type of liability coverage is called Uninsured Motorist Bodily Injury Liability and this policy covers you and anyone in your vehicle if you are hurt in an accident where the other driver is at fault and has no insurance.
Collision Insurance
Collision Insurance covers your car for damage caused by another car or an object that hits your car. The coverage pays for the repairs to the vehicle and in some cases even includes the cost of a rental car while your car is being repaired. The biggest variable in the cost of collision coverage is the deductable that is selected. If the insured is willing to pay a higher deductable on a claim, then the insurance premium will be lower.
Comprehensive Insurance
Comprehensive Insurance is simply another way to say other than collision insurance. This coverage protects your car from damage that may have been caused by a hail storm or other natural disaster, fire and theft. It will also cover vandalism and glass coverage which would replace windows if they were damaged by road debris or hitting an animal.
All of these different types of insurance can be selected with various maximum coverage amounts. The coverage amount will dictate the cost of the coverage however it is wise to carry more than the minimum amount available to meet your state’s insurance requirements. In the event of a serious accident, you will want to be sure that your insurance covers all of the damage and injury bills. This ensures that your personal assets will not be jeopardized in a lawsuit filed against you in an attempt to recover additional money to cover damages.
Conclusion
Car insurance is a wise choice to protect yourself financially from damage that you may cause when operating a vehicle or damage that another person may cause to your vehicle. Once you understand the basic car insurance categories, you can evaluate the different car insurance quotes available and make a responsible and well informed decision. Saving a few dollars each month on premiums may seem like a good idea now but in the event of an accident, those few dollars saved could end up costing thousands of dollars in repair and court costs should you become involved in a lawsuit.