Auto Insurance and Types of Auto Insurance
When purchasing auto insurance for our vehicles there are many different routes to take. Some policyholder’s choose to opt for the bare minimum which is what their state mandates they carry for liability coverage. In most states, this mandatory minimum does not adequately cover much of anything, just a small amount of liability you may have from an accident you caused for damages and injuries to the other party. When a policyholder is in an accident it is probable that the they would have to pay quite a bit of money out-of-pocket if the accident was anything other than a very small fender-bender. The insured is taking a chance that this will never happen, but we all know that it does happen at the most unexpected times.
An insured may decide to purchase a little more coverage which would fall under the category of third party auto insurance. This gives a more coverage but still only protects the damage to property and injuries to the other party and their passengers. The policyholder has no protection with this type of policy, neither for damages to their vehicles or injuries to themselves or their passengers.
Most of us pay for full coverage on our vehicles and property even though the cost of vehicle coverage continues to increase over time. Driving a vehicle on the road is a big responsibility and it should be backed up with the necessary coverage to protect all drivers, passengers, pedestrians, and property. That’s what full coverage auto insurance does and that is why the cost is high.
Under a full coverage policy will be the following options. Liability coverage which includes bodily injury liability and protects the assets of the insured if they are found at fault. Also under this option is property damage liability that covers the repair or replacement of vehicles or property belonging to the other parties. Collision coverage will pay for the repair or replacement of the insured’s vehicle damaged in an accident. The comprehensive option will pay for the policyholder’s vehicle damages from something besides an auto accident, such as theft or fire.
Not everyone purchases the uninsured/underinsured motorist coverage but it is a good idea due to the fact that there are many uninsured drivers on the road these days. The good side to this coverage is that it also will pay for lost wages of the insured caused by the accident if the uninsured motorist can be identified. This option will also cover injuries to the vehicle owner’s passengers. Along with collision and comprehensive is a deductible which is the portion the insured pays towards costs related to an accident they caused before the insurance company starts paying their portion. This dollar amount on the deductible is set by the insured and can be from $250 to $1000 in normal cases. Another option that will ensure full coverage is the medical payments options that will cover medical or funeral expenses for the insured and passengers. There are types of coverage that all optional and usually inexpensive such as towing, roadside assistance, or rental car reimbursement. Having the above types of auto insurance coverage is recommended by the provider in order to be adequately protected while driving.