Auto Insurance Coverages

February 26, 2017 · Posted in General Articles on Car Insurance 

There are different types of auto insurance coverage available for your protection. Here are the most common types that an auto insurance company may provide.

Liability Cover – Liability coverage is the minimum auto insurance covered required by law in most states. It is intended to cover the victims of an auto accident that is deemed to have been caused by you. Your own bodily injuries or property damage is not usually covered by liability insurance.

Comprehensive Coverage – Comprehensive coverage is intended to cover damage to (or the loss of) the insured vehicle resulting from causes other than collision such as storm damage, theft, vandalism and fire.

Collision Coverage – Collision coverage, as it’s name suggests, covers damages to your car due to collision with other vehicles, stationery objects and any road obstructions.

Uninsured/Underinsured Cover. Uninsured and underinsured driver coverage protects you when the negligent driver has no auto insurance or insufficient insurance. In most sates this only covers bodily injury, and not property damage.

GAP Coverage – We all know that there is a sharp decline in the value of a car immediately after purchase. This means that any loan you took out to finance the purchase of the vehicle could be many thousands of dollars greater than the amount your auto insurance company would pay out if your car was stolen or became a total loss following an accident. Gap cover or loan/lease cover as it is also known is intended to bridge that gap in valuation and the amount you owe on the loan.

PIP Personal Injury Protection – PIP (also known as no-fault), covers medical and funeral expenses and lost wages of the driver and passengers in the insured vehicle no matter who caused the accident.

Pay-Per-Mile – A fairly new type of coverage is Pay-Per-Mile. It is so new that it is currently available only in a few states. Basically you pay auto insurance based on the usage of your car. The less you drive, the less you pay. The downside is that in order to benefit, you have to allow your auto insurance company to put some form of tracking device in your car.

Auto insurance policies are usually a combination of coverages. For example comprehensive and collision cover are quite often combined under the title “full coverage”. Whatever the terminology, it is always best to seek further advice before purchasing your policy.


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