Types of Auto Insurance and How to Choose the Right One for You

Types of Auto Insurance and How to Choose the Right One for You

Understanding how to choose auto insurance that works for you is critical. Finding the right insurance company can help you significantly reduce your insurance costs.

Choosing the best auto insurance policy is a delicate balancing act that frequently comes down to preferences and needs versus costs. Car insurance isn’t one-size-fits-all, so the options are endless. To choose the right auto insurance policy for your specific needs, you first need to understand the types of auto insurance. Below, we’ll break down some of those types to help you determine which suits your needs best. 

Types of Auto Insurance and How to Choose the Right One for You

Understanding the Types of Car Insurance

Learn about the various types of insurance available and what each one does. Here, we’re focusing on several core types of insurance coverage that you should know about:

Collision and Comprehensive Coverage

Collision coverage covers the costs of an accident with another vehicle or an object on the road, regardless of who is at fault. So, it protects your car in the event of an accident. This type of insurance is first-party coverage that pays for your vehicle’s repairs rather than waiting to be paid by the other driver’s insurance. If the repair costs exceed the value of your car, the company may declare it a total loss. Instead of making repairs, the company will write you a check in the amount of your car’s value. This insurance coverage is a must if you own a new car.

Comprehensive is a type of first-party insurance that covers non-accident damage. For instance, you could file a claim under your comprehensive coverage if your car is stolen, vandalized, or damaged due to inclement weather, explosion, riot, or other disturbance. This coverage protects against various unforeseen incidents aside from accidents.

Third-Party Liability Insurance Coverage 

Third-party liability coverage gives you legal protection if you injure someone else or damage property while driving.

For instance, liability coverage will come in handy if you crash into someone’s garden or garage, rear-end another car, or cause a collision that hurts another driver. This coverage will pay for medical costs related to injuries, fixes to damaged property or vehicles, and any legal fees up to the policy limit.

Medical or Personal Injury Protection

Medical coverage, regardless of fault, covers some medical expenses for you and the other passengers. This type of coverage will apply whether or not you have health insurance that covers medical costs. Personal injury protection is similar to medical. It only differs because more comprehensive coverage and bigger policy limits are available. Of course, you’ll have higher premiums and a deductible to meet.

Personal injury protection coverage is not mandatory everywhere, but purchasing it could still be beneficial because, because, unlike health insurance, it also covers other expenses that stem indirectly from the accident, such as lost wages, funeral costs, etc.

Uninsured Auto Coverage

Uninsured auto coverage protects you and the passengers in your car in the event of a collision caused by an at-fault driver who is underinsured or uninsured. In addition, this coverage will also protect the policyholder in the event of a hit-and-run.

This coverage can help pay for property damage, medical costs, and other expenses.

Accident Benefits Coverage

If you, as a passenger or a pedestrian, need medical help due to an accident, this type of coverage can assist you.

This coverage is available regardless of who is at fault in the accident. In addition, it can help pay for lost wages or medical costs that your health insurance may not cover, such as rehabilitation, prescription medications, or physical therapy.

Loss of Vehicle Use

This type of auto insurance coverage is, of course, optional. However, it can help pay for car lodging costs if your car is out of commission due to an insured risk.

When you are involved in an accident and are unable to use your car, this coverage will provide you with transportation. Loss of vehicle use coverage can help you take a taxi or rent a car while yours is being repaired.

How to Choose the Right Type of Auto Insurance?

The type of insurance you require and the policy limit, are ultimately determined by your individual circumstances. The place where you live, your age, the type of car you drive, and your driving history can all help you decide what type of auto insurance coverage is right for you.

Of course, it’s best to contact insurance experts who can quickly find the best coverage for you according to your budget and lifestyle. 

Types of Auto Insurance and How to Choose the Right One for You

Wrapping Up 

Now that you know the main types, shopping for car insurance will be much easier. Understanding your needs, doing your research, and comparing quotes are the keys to finding the right insurance for you.

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