What Types of Car Insurance are Available and What Do They Cover?

Liability coverage is mandatory in most U. S. states as a legal requirement for driving a car. Liability insurance can help cover damage from injuries and damage to other people's property for which you are legally responsible as a result of a covered accident.

Collision insurance can cover damage to your car after an accident involving another vehicle and can help repair or replace a covered vehicle. Comprehensive insurance can provide an additional level of coverage in the event of an accident involving another vehicle. You can help pay for damage to your car caused by incidents in addition to collisions, such as vandalism, certain weather events, and accidents involving animals. Uninsured motorist insurance can protect you and your car against uninsured drivers and hit and run accidents.

This coverage is often combined with insurance for underinsured motorists. Many drivers choose to have the minimum liability coverage to save money, but this may not provide them with enough coverage. Underinsured motorist insurance can protect you in the event of an accident with a driver whose insurance isn't enough to cover the costs. Medical expenses after an accident can be very expensive.

Medical payment coverage can help pay for medical costs related to a covered accident, regardless of who is at fault. Liability insurance is the most important type of car insurance. It works together with comprehensive and collision coverage, and forms the foundation of strong auto insurance coverage. Liability insurance covers the expenses for which you are declared responsible. So if you cause an accident, liability insurance will save you from having to pay thousands of dollars out of pocket.

With liability insurance, your insurer will pay to repair or replace the other person's damaged property up to a certain limit. Comprehensive insurance protects your vehicle from a full list of bad things that could happen. Things like wildfires, fallen trees, debris from other cars, thefts, acts of vandalism, riots, fires, explosions, earthquakes, landslides, other weather events, and wildlife. No matter where you live or how good your luck is, bad things can happen. With comprehensive insurance, you'll be covered. Collision insurance isn't mandatory unless your lender or renter requires it.

But if you can't afford to replace your car with cash, you need collision insurance. This way, if you destroy your car, you won't ruin your budget by replacing it. Personal Injury Protection (PIP) and Medical Payment Coverage, or MedPay, cover your medical expenses after a car accident, no matter who was at fault. They also cover medical expenses for injured passengers if you were the at-fault driver. Personal injury protection, sometimes called no-fault insurance, can also cover funeral expenses, child care, or lost wages due to injuries caused by an accident. If you're driving for a rideshare company, you'll want to consider an additional layer of protection called rideshare insurance.

If you drive for Uber or Lyft, your personal policy won't cover you. And rideshare companies don't offer full coverage. Rideshare insurance can make a difference. Gap insurance will cover the difference between the value of the car and the amount you still owe on your loan if you add up a new car that hasn't been paid for. Temporary car insurance is coverage for a vehicle that you only plan to drive for a while, typically six months or less. Car insurance is one of the most common types of insurance out there but it's important to understand all the different types available and what they cover so that you can make sure that you have the right coverage for your needs.

Liability insurance, comprehensive coverage, collision coverage, personal injury protection (PIP), medical payment coverage (MedPay), uninsured motorist insurance, underinsured motorist insurance, gap insurance, and temporary car insurance are all types of car insurance. Each type provides different levels of protection depending on what kind of incident occurs and who is at fault in an accident. It's important to understand what each type covers so that you can make sure that you have adequate protection in case something happens while driving.