When you first start looking, you realize that there are multiple types of car insurance coverage available, and making the right choice might seem overwhelming.
You don’t know what type of coverage you might need, nor what the minimum auto insurance coverage your state is. You might also wonder if there is any way you can save money and still get your required coverage.
Well, the good news is, this quick guide will provide help.
Here is a brief description of the five types of auto insurance coverage and tips to help you save on your car insurance policy.
Five Types of Car Insurance Coverage
1. Liability Insurance
Liability insurance covers property damage repair costs and your medical bills if you get involved in an accident. It provides vital extra protection if you are the at-fault party in an accident.
You otherwise are responsible for claims which exceed your coverage upper limit. No one wants to end up having to pay a large amount of money just because your claim exceeds your policy limits!
While most states have a minimum liability insurance coverage requirement for drivers, it’s better to have more if you can afford it.
2. Collision Coverage
Collision coverage pays for auto repairs in a covered accident. It even bears the value of your car if it’s totaled, and the repair costs exceed your car cost.
Depending on the value, it may sometimes not be worth having collision coverage if you have an older car. However, if you have a new or expensive car, then collision coverage proves helpful at getting you back to where you were before the accident.
If you are paying off an auto loan, you are most likely required to carry collision coverage as part of your policy.
3. Comprehensive Coverage
It’s not always an accident that makes you claim insurance coverage.
There may be situations where something unrelated to an automobile accident damages your car. For example, it may have borne the brunt of weather damage, gotten hit by deer, or gotten stolen.
In these instances you may wonder if your insurance company will cover the loss.
While collision and liability insurance covers accidents, it doesn’t provide coverage in these situations.
This is where you need comprehensive coverage.
This insurance coverage is indeed expensive but worth having if you can afford it, and you may be able to save some money if you have anti-theft and tracking devices installed in your car.
While it’s necessary if you are a lienholder, you may not require it if your car can be easily replaced.
4. Personal Injury Protection
Unlike comprehensive coverage, which you needn’t necessarily purchase, you may want to include personal injury protection coverage as part of your car insurance policy, because the injuries sustained in an accident can get expensive and complicated.
And you don’t want to end up with added medical bills and costs.
Personal injury protection helps cover medical costs. It covers not just yours but also your passengers’ medical bills. And it doesn’t even matter who was at fault for the accident.
5. Uninsured or Underinsured Motorist Protection
While all drivers are required to have auto insurance, unfortunately, some don’t. So there’s always the risk of you ending up in an accident with someone who doesn’t have insurance. And you won’t receive a payment if they don’t have coverage.
This is a scenario you want to avoid at all costs.
There’s also the risk of the driver having only liability insurance. The problem here is that many states have a relatively low minimum liability coverage requirement.
So there’s the chance that it may not be enough to cover all of your accident expenses. In this case, you end up receiving a lower amount of money than necessary to cover the cost of vehicular damages and personal injuries.
Uninsured or underinsured motorist protection will help with your expenses, and most likely something you will be interested in having since a 2021 study shows that about 1 in 8 drivers are uninsured!
The good news is that it’s relatively inexpensive to add uninsured/underinsured motorist protection to your existing policy. Besides, it can prove really helpful if you end up in an accident with an uninsured or underinsured motorist!
There you go!
You now have a much better understanding of the five types of car insurance coverage available. It’s up to you to decide which coverage you should and preferably must get based on your budget and coverage needs.
To help get you protected, contact Preferred Insurance Agency today and we’ll save you money on your same auto insurance policy or better, and make sure you and your family are protected from the unexpected. We’re serving providing the La Crosse and Onalaska with the best auto insurance prices and customer service. We serve the surrounding areas of Iowa, Minnesota, and Wisconsin as well.