What are the 4 Main Types of Automotive Coverage Insurance?

When a driver buys a policy, they enter a contract with the insurance company. The driver, known as the policyholder, pays the premium, and the insurance company compensates the policyholder for any loss as defined in the agreement. Most states have minimum auto insurance requirements that drivers must fulfill before they can legally drive a car. If you are looking to sign up for a policy, it’s important to talk with an insurance agent to gain insight on the best coverage options. The best policy caters to your specific needs. 

If you’re looking for affordable insurance for your car, Pronto Insurance is a top-rated car insurance company. It provides custom and affordable policies that cater to repair and replacement costs. The following are some of the critical automotive coverage insurance.

1. Liability Coverage

When you get in an accident while driving, and it is established that the accident was a result of your fault or negligence, the liability coverage is designed to help you. Most US states require a driver to have liability coverage to drive legally. Liability insurance may cover damages for injuries and destruction caused by your fault or negligence while driving. Liability coverage provides the following benefits:

• Covering the cost of repair or replacement of the destroyed property belonging to affected parties.
• Covering the medical bills of the affected parties in case they are hospitalized, or they seek medical treatment.

The amount that the insurer pays for liability coverage is dependent on your coverage limits. There are minimum liability limits set by the state, but you can buy additional coverage. The extent of compensation after property damage or bodily injury can be determined by certain limits. Always ensure that you have appropriate limits.

Liability coverage only caters to 3rd party claims of property loss or bodily injury, but they don’t cover the policyholder. For instance, if a policyholder causes an accident and is hurt, the liability insurance won’t cover their medical bills. They may need personal injury protection.

 

2. Collision Coverage

Collision coverage may cater to the expenses of repairing or replacing your car after getting into an accident with another car or object. Collision coverage works in these instances:

• An accident that involves another vehicle
• An accident that involves objects like trees or fences
• An accident without any other car or object, but the car rolls around

The insurer only pays up to the agreed-upon limits. It’s critical to find out from an insurance agent the full application of collision insurance to avoid interpreting it inaccurately. Some of the things that collision insurance doesn’t cover include:

•         Car damages that are unrelated to driving, e.g. burglary or natural disasters
•         Damage caused to another vehicle in an accident that you caused
•         Bodily injuries sustained by you or another person in an accident

In certain instances, repair costs may be greater than the current market value of the car. And in such situations, the insurance company pays the current market value of the car.

3. Personal Injury Coverage

Personal injury coverage caters to medical expenses, income loss, and funeral costs after an accident. The extent of the compensation depends on the agreed-upon limits. Depending on the severity of an accident, the damage can be extensive. But personal injury insurance may take care of your medical expenses and those of other injured passengers. Personal injury coverage may apply even when you are not driving. For instance, if you’re walking somewhere and a car hits you, your personal injury insurance can cover the medical expenses. The policy works regardless of who is at fault. But the following are some of the instances where personal injury coverage may not be applied:

• Compensation of damaged property in an accident
• Covering medical expenses of the other driver in a collision
• Injuries suffered in an accident while engaging in unlawful activities like fleeing from the police
• Injuries suffered in an accident that you were paid to drive

It’s important to get all the information around personal injury coverage to ensure that the limits are adjusted to your specific needs.

4. Comprehensive Coverage

Comprehensive coverage may help cover the cost of repair or replacement after a car is vandalized, stolen, or damaged during bad weather or fire incident. But the following things are not covered:

• Damage to your car after an accident involving another car
• Damage to another person’s car after an accident involving your car
• Medical expenses for yourself or another person after an accident

When buying comprehensive coverage, you may select a set deductible. This is your own money that you put toward a covered claim. If your car is fitted with security-enhancement systems, the insurance premium quoted by the insurance carrier might be decreased.