There are many different types of car insurance and it’s up to you to choose the best one for you. Fortunately, there are four main categories you can opt for. These are Collision, Liability, Temporary and Comprehensive. Each of these categories comes with its own pros and cons. Before you make your decision, be sure to do your homework.
Liability
Liability car insurance pays for damage caused by your vehicle. It also covers other people’s medical expenses and legal fees, if you are sued. You can choose between liability-only and full coverage policies.
Most states require motorists to purchase liability and full coverage car insurance. However, the amount of coverage you need may vary based on your state’s regulations and your personal situation. Some of the coverage types you can choose from are collision, comprehensive and uninsured motorist.
Collision coverage pays for the repair of your vehicle after an accident. This includes repairs to your vehicle, and damages to buildings, fences and lamp posts. Comprehensive coverage is sometimes sold with collision. In addition to the cost of your policy, you may also need to pay a deductible to receive a claim.
Collision
Collision car insurance helps you avoid the financial ruin of not being able to repair your vehicle after an accident. If you have the right collision coverage, your insurance company will reimburse you for the costs of repairs, which can be invaluable to people with little money to spare.
Comprehensive car insurance covers the costs of repairs for damage to your own car, as well as to other items on your property. In addition, the policy may pay for medical expenses if you’re injured in an accident. It also protects against vandalism, theft and fire.
Choosing the right type of coverage depends on your needs. For example, you might want comprehensive if you live in a high-risk area.
Comprehensive
Comprehensive car insurance is a great way to protect your finances should something happen to your car. This type of coverage can pay for damage to your car such as hail, fire, and other weather related events. It also pays for damage caused by theft, vandalism, or other unpreventable incidents.
One of the best ways to decide whether comprehensive car insurance is a good fit for you is to figure out how much it will cost. You can do this by comparing quotes and doing a little research.
The cost of comprehensive auto insurance depends on your location and the type of policy you purchase. Insurance providers may also offer discounts if you bundle several types of insurance.
Gap
Gap car insurance is an insurance policy that covers the difference between what you owe on a loan and what the car is worth. There are a number of reasons to buy this type of insurance, including protecting your investment.
The cost of GAP insurance can vary greatly from company to company. Insurance agents are equipped to help you find the best deal for your situation.
When you get an auto loan for a new vehicle, you may be required to purchase gap car insurance. This is because the car will depreciate rapidly once it’s driven off the lot.
The value of a new car depreciates at least twenty percent in its first year. It can be even more if you have a smaller down payment or an extended term on your financing.
Temporary
Temporary car insurance is a relatively affordable solution to a number of situations. The key to selecting the best type of temporary insurance is identifying your specific needs. For example, if you only drive a few times a year, you may want to purchase a six-month policy. If you often rent or borrow cars, non-owner insurance might be the better option.
You can buy short-term insurance through a rental car company or your own insurer. Many insurance companies allow you to cancel your policy at any time. However, you’ll usually have to pay a fee to do so.
In addition to a deductible, a good temporary car insurance plan will cover you if your car is impounded. These policies will also offer additional protection in the event of an accident or theft.
Uninsured/underinsured motorist
There are two types of coverage that are available when a car accident occurs. These are uninsured/underinsured motorist car insurance and property damage coverage. Each type of coverage may or may not be required in your state, depending on where you live.
Uninsured/underinsured motorist coverage is designed to bridge the gap between your damages and the liability limits of the at-fault driver. This means that you do not have to pay out of pocket for medical expenses, lost wages, or other damages.
Uninsured/underinsured coverage can be purchased separately or as an add-on to your existing policy. The coverage limit you select will depend on the amount of assets you want to protect.