Insurance is a grudge purchase we wish we did not have to make. However, we are extremely happy that we did, when someone rides into the rear of our auto. Moreover, a number of U.S. states insist we have a liability insurance policy. This is where things become a little complex because there are seven possibilities to consider.
7 Types of Car Insurance
1. Liability Insurance
We should have this at the very least, as it covers us for any injury and damage we cause while driving. While liability insurance will not repair our vehicle, it will pay for damage that we cause to other vehicles, buildings, and other assets. It also covers medical bills. If the police decide we caused the accident, we have to pay.
2. Collision Insurance
This is the next priority to consider. This covers accident damage to your auto, whether you caused the collision or not. Remember, the other party that made the accident may not be in a position to pay immediately, and you do need to be mobile. If your car is getting old, you may choose to self-insure it.
3. Comprehensive Insurance
Thus far, we have only considered traffic accident cover. What happens if your automobile suffers damage from the weather, bumps into an animal, catches alight, or worse still, someone steals it? The answer is you compensate yourself unless you have comprehensive insurance cover. Having anti-theft and tracking devices brings the cost down.
4. Uninsured Motorist Cover
Most U.S. states set the bar low for compulsory liability insurance. Moreover, the cheaper the other party’s cover, the less likely they will be able to pay the balance of your claim. If you can afford it, it makes sense to be able to pay the excess from your own insurance. If you do not take uninsured motorist cover, you could end up going to court to claim.
5. Personal Injury & Medical Expenses
Despite the best efforts of auto manufacturers, traffic accident injuries can cost a fortune. If you have superior health insurance, then that scheme may cover your own medical costs. If not, then cover for personal injury and medical expenses makes sense, especially as it usually covers the medical bills of passengers too.
6. No-Fault Insurance
If you are resident in a state where no-fault insurance is available, you may like to consider this form of cover to protect yourself regardless of where the fault lies. This pays your own, and your passengers’ medical bills up to the state limit. No-fault insurance could also compensate you for lost income, and the cost of childcare and housekeeping services.
7. Gap Insurance
This cover is well worth considering if you are still paying for your auto, and the outstanding balance is more than the market value. Some lenders insist on this protection, other leave the choice to you. If your car is totaled in a collision, you can take comfort from the fact you do not have to chip in for a car lying in the scrapyard.
All these types of insurance are by no means essential for every motorist. Pick the ones you need, and are able to afford. A good insurance broker should be able to provide objective advice on where to start.
Hotwire Insurance Services, a full-service independent agency, works for you and not insurance companies and does not charge a broker’s fee. Hotwire Insurance Services local agents can answer all your insurance requests.
