The 4 Basic Types Of Car Insurance Features
Shopping for auto insurance can be a confusing undertaking. There are so many terms the average new driver is not acquainted with that they can make one's head spin. When all the mystique and wonder is brushed aside, however, there are four basic types of coverage almost any driver will want to consider. Two of which are generally required by law in most states.
The four basic types of car insurance coverage areas are:
* Personal Injury Protection. This is basically a medical policy that tends to follow the covered person from car to car. That's right, in many cases the covered person does not even need to be in their own vehicle to be covered by this portion of a car insurance policy. This coverage pays medical bills, up to a set amount, following a crash. The limits and deductibles vary depending on what a buyer desires or the law demands.
* Liability. This coverage protects a motorist from damage they may cause in a crash to another person or property belonging to another. The minimum limits tend to be set by law, but the maximums can increase depending on what a buyer desires. This coverage is considered one of the most important for any driver.
* Collision. This type of coverage is generally optional. It pays for damage to your vehicle after a crash if you're at fault. The typical policy will pay for repairs up to the fair market value of a car or provide a loan pay off up to the fair market amount. This coverage is almost always demanded by companies that write auto loans, but is considered "optional" by most government authorities. Remember though, this doesn't pay what's left on a loan; only what the car is worth.
* Comprehensive. This coverage handles the things that don't necessarily happen in a crash. Damage caused by vandalism, bad weather, fire and so on are generally covered under a car's comprehensive policy. Again, this coverage isn't required by the law in most states, but loan companies will generally demand it to protect not only their investment in your vehicle, but you as well. Without this coverage, many a person could find themselves up to their ears in debt with no car to drive.
Not everyone needs the four basic types of coverage, but well-protected drivers insist on having them even if they are not required by a loan agreement or the law. Since the rule of the road is anything can happen, being covered well just makes sense.
