Car insurance is a necessity for you and your vehicle. If someone hits your car, they are responsible for the repairs because you have car insurance. However, it is not just as simple as that because there are different types of car insurances available and everyone needs to purchase one that best covers their needs. So it is important to get an Auto Insurance Quote from different insurance companies and choose the best one.
Below is an overview of the most common types of car insurance and what they cover.
Types of Car Insurance Coverage
Car Insurance is complicated as it includes several types of coverage such as
Liability Coverage
Liability coverage covers bodily injury and property damage liability. It protects the policyholder if they are involved in an accident where someone else is injured. It covers injuries to others in an accident. It pays for the medical bill and the repair cost of the other party if the damage is due to negligence while operating a vehicle.
Bodily injury liability provides medical, work loss, and funeral benefits to the other individuals involved in an accident. Property damage liability covers damage caused to another party’s vehicle.
Note: Liability coverage only pays for the driver’s injury, not the passengers.
Liability coverage is written as a combination of three numbers. 10/20/10 is typical liability coverage. It means that the insurance company will pay:
- 10 thousand dollars for bodily injury to one person,
- 20 thousand dollars to multiple people injured in an accident, and
- 10 thousand dollars for another person’s property damage in an accident.
Liability coverage does not pay for your medical bills if you are injured in an accident, nor does it cover your damaged vehicle’s repair cost. On the contrary, it covers injuries to others in an accident and pays for the other party’s medical bill and repair cost. However, it helps to pay for your legal defense if you are sued after being involved in an accident. Liability coverage is mandatory by law in almost all states in the U.S.
Comprehensive Coverage
Comprehensive coverage pays for damage to or loss of your vehicle due to incidents other than a collision with another car. It is not mandatory by law; however, it is highly recommended, as it includes damages caused by vandalism, theft, fire, flood, tornados, hitting an animal, falling objects, and many other factors. Comprehensive coverage also covers windshields and headlights damage. It comes with a deductible which is a certain amount of money paid by the policyholder before the insurance company compensates for damages.
Collision Coverage
Collision coverage protects the policyholder when his vehicle is damaged in an accident due to his fault. A collision could be with another car, mailbox, pole, tree, guard rail, or other inanimate objects. It includes repair costs, loss of use (rental car), and additional associated costs such as injury to passengers in the insured’s vehicle. It is mandatory by law in a few states, whereas it is optional in other states.
Comprehensive and collision coverage are combined into one type known as collision and comprehensive coverage or full coverage. They are also compulsory in most cases unless the car is financed or leased.
Collision Deductible Waiver
Collision Deductible waiver is an agreement between an insurance company and a policyholder that waives charges for damages to his vehicle in case of an accident with an uninsured driver. If you have a collision deductible waiver, your insurance company will not require you to pay the deductible before making a claim.
Uninsured/Underinsured Motorist Coverage
UM (uninsured motorist) covers financial loss sustained by the policyholder due to an accident with an uninsured vehicle. It pays for your medical bills and vehicle repairs if the other party involved in an accident has insufficient or no insurance. UIM (uninsured motorist bodily injury coverage) pays for injuries to other people in your vehicle when an uninsured vehicle is responsible for an accident. UIM also covers bodily injury to passengers in another car when you are at fault in an accident.
State laws usually determine the requirement for this cover, and it varies from state to state. It is not compulsory, but it is highly recommended to protect you from financial loss after an accident with an uninsured vehicle. However, as a rule, UM/UIM coverage is required in states where bodily injury liability limits are less than 50,000 dollars per person involved in an accident.
Personal Injury Protection (PIP)
PIP (personal injury protection) is included as a type of insurance along with property damage liability and uninsured motorist coverage. It is also called no-fault coverage. It provides coverage for medical, surgical, lost income, child care, and funeral costs sustained by the policyholder due to an accident regardless of who is at fault. PIP cover is also applicable to other passengers in your vehicle.
Medical Payments Coverage
Mandatory in some states, medical payments insurance covers the cost of all necessary medical treatment for injuries sustained by you, your passengers, your household members, or drivers of the insured vehicle regardless of who is at fault. In addition, it covers deductibles of health insurance and PIP. It is similar to PIP but limited in scope.
Roadside Assistance
Most policies include emergency roadside assistance services. It helps the insured person gain access to the necessary equipment and labor to help him on the road in case of a breakdown during an emergency, such as a flat tire, insufficient gas, locked door, etc. Roadside assistance also helps tow your car to a nearby garage if it gets inoperable.
Guaranteed Auto Protection (GAP)
Generally, car insurance only pays for the actual value of the car. Your vehicle depreciates over time, and the actual value of that car may be lesser than what you own on loan. GAP insurance is designed to pay for the difference between the vehicle’s actual cash value and a new one, should your car be stolen or damaged beyond repair. It extends Comprehensive and Collision coverage, which covers the insured if their vehicle is declared a total loss after a collision or comprehensive claim.
Rental Reimbursement
The rental reimbursement covers the costs of renting a replacement car while yours is in the shop getting repairs. There is a limit to the daily rent and the number of covered days. This cover is essential for people who need a car to do their daily jobs or have necessary appointments when theirs is being repaired.
Factors affecting the car insurance and premium rates
Car Insurance quotes in Corpus Christi TX and premium rates will be higher:
- If you are a new driver or you have aged above 70 yrs.
- If you live in an area with high theft or accident rates.
- If you have multiple violations.
- If you have previous insurance claims.
- If you have a high-value vehicle.
Premium rates will be lower
- if your car is equipped with safety features such as airbags and anti-lock brakes.
- If you have different kinds of car insurance coverage.
- If you have a good credit score.
You can gain discounts on multiple vehicles, multiple policies, and no claims. Get an auto, homeowners insurance quote and other required policies quote from one insurance company to maximize discounts.
Bottom Line
An insurance policy will prove beneficial only when you need it. Do not compromise on the amount of coverage, as it can be very costly to make up for what you have lost. So keep the above factors in mind when buying your next auto insurance plan.
