Car Insurance Coverages – What Are They?

There are different types of auto insurance coverage available for your protection. Here are the most common types that an auto insurance company may provide.

Liability Cover. Liability coverage pays others for damages resulting from a car accident that you cause. It also pays for a lawyer to defend you if you are sued for damages.

Comprehensive Coverage – Comprehensive cover requires your auto insurance company to pay for damage to your car caused by something other than an auto accident such as fire, theft or vandalism. This sort of coverage is subject to a deductible. If you decide upon a $100 deductible, then you pay the first $100 and the company pays the rest up to the policy limit. Sometime this cover is combined with collision protection that covers you for damages sustained in a car accident.

Collision Coverage. Collision coverage is intended to cover losses to your car when you are involved in a collision with another car or with a stationery object.

Uninsured/Underinsured Cover – Uninsured motorist cover is available for protection if you are involved in a traffic accident with a driver who is either uninsured or underinsured.

GAP Cover – When you buy a new car or even a fairly new used car, it’s vale will depreciate by at least 20% when you drive it off the lot. So, on a $30,000 car your auto insurance company will only pay out $24,000 at the most in the event of it being stolen or totalled, yet you will still have to pay off the $30,000 loan. If you have GAP cover than you will be able to recover the $6,000 difference.

PIP Personal Injury Protection – PIP (also known as no-fault), covers medical and funeral expenses and lost wages of the driver and passengers in the insured vehicle no matter who caused the accident.

Pay-Per-Mile – A fairly new type of coverage is Pay-Per-Mile. It is so new that it is currently available only in a few states. Basically you pay auto insurance based on the usage of your car. The less you drive, the less you pay. The downside is that in order to benefit, you have to allow your auto insurance company to put some form of tracking device in your car.

With the Internet easily accessible you have a vast amount of knowledge at your fingertips to help you choose the best coverage for you and your lifestyle.

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