What Types of Car Insurance are There?

July 1, 2017 · Posted in General 

If your policy has you confused, you may be wondering what types of car insurance are there? This article aims to cut through that confusion and detail what you should be looking for depending on your circumstances. Because insurance is necessary for your overall financial security, you want to get this right.

Most states require that you cover the other guy’s losses if you cause an accident. To ensure that you can do this, you have to carry liability insurance. Note that this kind of insurance only covers the other driver, it does not protect you or your vehicle. If you do not carry liability insurance, you can have your license suspended or even go to jail.

Now you’re probably thinking what happens to your own car if you need to get it repaired or replaced. The answer is that you need collision coverage. This protects you if you are at fault in an accident.

Okay, so now we’re at the stage where you didn’t cause the accident but the other guy isn’t being responsible and doesn’t have the liability insurance required. If this is the case, you will want to have taken out Uninsured Motorist coverage which insures you when the other driver didn’t have coverage.

Finally, we need to talk about comprehensive coverage which protects you if a tree falls on your car in the middle of the night or if vandals smash up your windows. With comprehensive coverage, you are protected against all manner of damages which happen when you are not in the car.

Other kinds of car insurance that we won’t go into here include Work Loss, Gap insurance, Rental Car Reimbursement, Towing and Labor and Custom Parts and Equipment to just name a few.

What types of car insurance are there? Well, the important ones include liability, collision, comprehensive, and uninsured motorist. While there are other parts of some deluxe policies, these four give you the building blocks for your family’s financial security.

 

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