For most car owners, knowing which type of car insurance to purchase can be somewhat confusing. This is partly due to the multitude of insurance coverage options on the market. Additionally, the jargon used in describing insurance products can leave you bewildered and at a loss on what to do.
If you are looking for the best insurance policy for your car but don’t know which one to choose, you have come to the right place. Here is a comprehensive breakdown of the most common insurance types and the expenses they cover.
As the name suggests, this is a cover that shields you from liability in case of an accident. It is often compulsory and is also commonly known as third party or basic auto insurance.
Essentially, if you damage another person’s car, say during driving lessons, or hurt them in an accident, you can use your liability insurance to cover the ensuing costs. The cover does not, however, extend to your car or any bodily harm you suffer.
Comprehensive vehicle insurance protects your vehicle from a wide array of perils. These hazards include damage caused by fire, weather, or theft. It is also the insurance cover you can turn to if a tree falls on your car, thus damaging it. Usually, the comprehensive insurance coverage limit is the actual value of the vehicle.
Comprehensive car insurance is advantageous because it covers virtually any possible damage to your car. Unless you damage your vehicle maliciously and intentionally, there is hardly any kind of car problem that this policy cannot cover.
On the downside, however, this insurance option is rather expensive. This is why most people opt for basic cover rather than comprehensive insurance. Additionally, you will have to pay deductibles before you can claim insurance benefits.
Uninsured or Underinsured Motorist Insurance
An uninsured motorist cover protects you in case a driver without a liability cover hits you. Without an uninsured motorist cover, you would have to bear the costs of repairing your car or paying hospital bills if another driver hits and fails to give you his insurance information.
On the other hand, the underinsured motorist is one whose insurance limit does not cover the damage caused to you or your car fully. Often, the uninsured or underinsured motorist insurance covers go hand in hand.
Medical Payment Insurance
Another common type of auto insurance coverage is medical payment coverage. This policy will cover any medical costs that arise from a car accident, regardless of where the fault lies.
Personal Injury Insurance
You can also take a personal injury cover, which will shield you against bodily injuries you suffer during a car accident. The good thing about a personal injury cover is that it can also cover any income loss or other accident-related expenses.
The first step in choosing the right insurance cover for your vehicle is understanding the options available to you. Now that you know the most common types of vehicle insurance covers, all that remains is for you to choose the best option for your car. Be sure to weigh the pros and cons of each option carefully before you make your choice.