Types of Car Insurance

It is universally accepted that once you get yourself a car that you will need some sort of insurance to cover the car. In most countries it is illegal to drive a car without insurance. The requirement for the insurance isn’t so much to protect you but it is to protect other people that might be involved in an accident that you caused. Say you accidently hit a person that will need long term medical care. If you aren’t a rich person this could certainly cost you more than you can afford, even bankrupting you in the process.

In most cases and in most states there are three types of car insurance products available to consumers. They are liability coverage, physical damage coverage and uninsured motorist coverage. Each of these coverage types has its own function and we will go into each later on. Each plan or car insurance quote that you get will be a combination of each of these insurance types in different ratios. This is the exact reason that you should be careful when comparing car insurance quotes from different insurers. You can be certain that the ratios will be different and the maximums will also be different. You must compare apples with apples.

Liability Coverage: This is the most common form of auto coverage. This coverage type covers all body injury and property damage that occurs to third and second parties involved in the accident. The coverage will look after all the medical expenses and long-term treatments of that person. It will even go as far as to cover the expenses due to death or if a lawsuit is filed against you. The most important part of this coverage is that it covers property damage that is caused by you in the accident. This means that it will cover the repair costs of any buildings damaged by you during the accident. For most this is a coverage option that can’t be foregone.

Physical Damage Coverage: There are two main categories in this coverage. It is again divided to comprehensive and collision. A comprehensive auto insurance plan is one where you will get coverage for natural disasters, robber but not for accidents. This is considered a liability plan where only the damage of the other party is covered with some minor exceptions to your car. A collision plan will cover your car in the case of a collision and also include all the benefits of a comprehensive plan.

Uninsured Motorist Coverage: This plan covers you, your family, any property damage including your car should you be unfortunate enough to be hit by a person who doesn’t have any insurance. Again this coverage item can be split up into 4 different types. The first is the uninsured motorist coverage which takes care of collision damage even if it is the other driver’s fault. Under-insured motorist coverage is where the other driver might have insurance but has limits that are too low to properly cover your claims. Uninsured motorist property damage covers the damage that is done to other property excluding the car by a non insurance motorist. Under-insured motorist property damage covers damage done to other property excluding your car should the other motorist’s insurance be insufficient to cover your claims.

What are described above are the kinds of auto insurance coverage items that will be most common in the policies that you will receive in your car insurance quotes. Each plan will be a mixture of each of these coverage items. For the best performing insurance policies you must take into account where you live, your living standards, how much risk you are exposed to from which areas. This way you are able to trim the access off and bulk up insurance where it is necessary.