Types of Auto Insurance

Types of Auto Insurance

July 27, 2021 0 By Sylvia Watkins

What exactly is auto insurance? Auto insurance is a legal contract between you and your insurance provider that safeguards you financially in case of a crash or theft. In return for your paying a regular premium, the insurer agreed to cover your claims as outlined in your coverage. However, what are the different types of coverage available, and how do you choose the right one for you?

Most people go with personal auto insurance coverage because they are affordable and can be used for just about anything, including car rentals, home and garden, and life insurance as well. The problem is that they do not provide the kind of coverage needed in the case of a major accident. Typical personal auto insurance coverages only cover the other driver for bodily injury damages and usually only up to the limit amount set by the state. They also usually only cover your own vehicle.

Personal auto insurance coverage also protect you against property damage. This can include damages caused by vandalism, such as a road side collision. It can also include medical bills, which may be collected from a doctor or other medical provider if you are injured in a wreck. The insurance may also cover your family members if they are injured in a wreck, as well as the costs of their treatment.

Collision Coverage is another type of policy that protects you in the case of an accident. Basically, this type of policy pays for damages to your vehicle caused by collisions with another vehicle. This differs from personal auto insurance in many ways. One way is that the lender may require that you have collision coverage on your vehicle, which will raise your rates (and possibly the interest rate). Another way is that your lender may require you to purchase comprehensive coverage, which will require you to pay a higher rate, but also requires you to purchase collision coverage in addition to comprehensive coverage. You can usually choose to purchase collision only, or comprehensive and then choose the deductible for the amount of the deductible.

Ride Share Plans are a third category of personal auto insurance policies. Ride share plans provide coverage to those who rent cars and who use the cars for transportation. These policies typically only cover for liability, but they do typically provide very good coverage in terms of bodily injury and property damage. Unfortunately, these policies are often expensive and can limit the ability to collect damages should someone get hurt in a motor vehicle accident while using your ride.

As you can see, there are many different types of auto insurance available. The differences between the various types of coverage are often not clear, even to the professionals who provide these services. When it comes to motorcycle coverage and auto insurance, it is important that you understand all the factors that affect your cost. The deductibles, the exclusions, the premiums, and the other variables that can change the value of your insurance policy to make every rider’s situation unique.