Auto insurance has been the reason for many sleepless nights for a lot of people.
Regardless of whether you need auto insurance for businesses or personal coverage, a thorough understanding of the six types of insurance available will allow you to choose the best suitable option. Auto insurance protects your business, passengers, vehicle, and yourself in case of an accident.
Depending on your needs, there are six types of vehicle coverage available. The following offers a basic description of the available options and what cover each of them offers:
Aka Third Party Insurance. Liability insurance is essential as it covers you against third party claims if you’re responsible for an accident. It consists of two components, namely, Bodily Injury and Property Damage Liability.
Bodily injury covers the costs incurred by the other party due to injury or death as a result of the accident. These may include medical and, in case of a lawsuit, possible legal fees. Property damage covers the costs of repairs to the other party’s vehicle or property incurred during the accident.
Uninsured Motorist Coverage:
Uninsured or underinsured motorist insurance covers you if you’re involved in an accident with a motorist who doesn’t have auto insurance. It covers the costs related to medical bills as well as vehicle repairs incurred during the accident.
Comprehensive coverage insures you against acts of God (hail, floods,etc.) vandalism, and theft, and comes with a deductible. It pays for vehicle repairs or to replace your vehicle (up to the current market value of the car).
A deductible is an amount payable by you toward the repairs of your vehicle. Your insurance will then cover the outstanding amount. Deductibles decrease your monthly premium.
Collision insurance pays to repair or replace your car should you be involved in a collision with another vehicle or a stationary object, or if you’re involved in a rolling accident. This cover is typically an optional choice and comes with a deductible.
Medical Payments Cover:
Medical payments insurance pays for medical costs that you or your passengers may have incurred during an accident. Health care costs can amount to tremendous sums of money. Therefore, it’s in your best interest to always include medical payments coverage with your auto insurance.
Also called personal injury protection, it helps to pay for medical and other costs incurred by your injuries. Other expenses include those related to child care, rehabilitation, funeral costs, and loss of income.
Apart from the above, there are also various optional coverages available, which you can add to your auto insurance. By adding optional coverage to your insurance, you increase the monthly premium. The following is a shortlist of the extra coverage that’s available to you:
- Transportation rental reimbursement
- Gap or shortfall insurance
- New car replacement
- Towing and labor cost cover
- Sound system coverage
Make Sure You’re Insured:
Having a thorough understanding of the six types of vehicle cover will benefit you the next time you need to take out insurance. Remember that it’s imperative to take into consideration your needs to choose the most suitable type of insurance.