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Basic Types of Car Insurance Coverage & Definitions

You may have car insurance, but what are you paying for exactly? Like any other insurance, car insurance includes different types of coverage. These different types of car insurance coverage may be hard to understand, but with a little research, you can be more secure in your insurance. Below are some of the most common types that you can read about if you are interested in learning more about auto insurance policies. It is definitely good to know what each type of coverage provides so that you can decide whether it would be worth it to buy or skip in your policy.

Bodily Injury Liability

Most car insurance policies include bodily injury liability coverage, which pays the medical bills of anyone that you, the policy holder, may cause when you get into an accident. This type of coverage also pays the medical bills of the policy holder and anyone else listed on the policy that is injured while driving another person’s car with their permission. This means that if you get into an accident, whether you are driving your car or a friend’s, your car insurance company will pay for any injuries to other drivers. Having enough liability insurance is very important because medical bills can add up.

Personal Injury Protection

Personal injury protection coverage pays for medical bills of the policy holder and passengers of the policy holder’s car if they are injured in an accident. Personal injury coverage can sometimes also pay for lost wages due to injury. Check with your insurance agent to see how broad your personal injury coverage is.

Property Damage

Property damage liability insurance coverage pays for damage to another person’s property. If you are in an accident, this type of coverage pays for damages to the other driver’s car. Property damage coverage also covers other kinds of property that may get damaged in an accident. This means that if you hit a lamp post, building, or mail box, your insurance company will reimburse the owner of the property for the damage.

Collision Coverage

Collision car insurance coverage pays specifically for damage to your car in the event of an accident, even if you are at fault. Some collision coverage can even pay for damage to your car as a result of flipping over or running over a pothole. Most collision coverage will reimburse you for the cost of repairing your car, but keep in mind that collision coverage usually includes a deductible. A deductible is an amount that you will have to pay out of pocket before the insurance company begins reimbursing you.

Comprehensive Coverage

Comprehensive car insurance coverage pays for loss of property due to theft or damage from some other event besides an accident. This type of coverage reimburses you for property stolen from inside your car and pays for damages to your car due to hail, wind, fire, floods, and other events. Some coverage even includes damage to your car if you hit an animal. Windshield cracks might also be included in your comprehensive coverage, but you should check with your insurance agent to make sure.

Uninsured Motorists Insurance

Uninsured or under insured motorist insurance coverage reimburses you when a driver that does not have enough or any car insurance hits you, including hit-and-run drivers. With this coverage, your insurance company will reimburse you if a driver hits you and they don’t have enough insurance to cover your total loss.

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