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6 Basic Components of Car Insurance Policy

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Car insurance is essential for every vehicle. When thinking of purchasing one, you have to know what it consists of. There are 6 major car insurance components that are supposed to cover all possible accidents.

You can find out more at your insurance company, as well as ask about car insurance quotes online.

Car insurance
Photo by Erik Mclean

Quality insurance covers lots of things, starting with collisions and liability and finishing with human injuries. When you find out what yours cover and what’s needed to get the service in your state, it will be much less stressful dealing with it should the need arise.

In this article, we’ll go through all the 6 main components one by one.

Liability Coverage

This component is the most basic and required in almost all states. A driver must purchase liability coverage in the amount that is mandatory by law. This type can be divided into two sub-coverages:

? Property damage. This one will help you cover the costs of the damage you might cause to another driver’s car or other property due to an accident.

? Injury. If the accident was caused by your vehicle and injured another person, this coverage will help you pay for medical treatment.

Uninsured Motorist Coverage

Unfortunately, some people neglect insurance and drive without it. If your property is damaged or you get injuries because of such a driver, this type of coverage will help pay medical and repair fees.

There’s also an underinsured motorist coverage which will help pay those bills if the driver that caused the accident has liability coverage but it isn’t enough.

Whether this type is mandatory or not depends on the state.

Comprehensive Coverage

This component protects your vehicle from vandalism, fire, or theft. Replacement or repair will be covered. Keep in mind this type has a deductible, so you’ll have to pay some money yourself until the insurer reimburses the expenses according to your claim.

Collision Coverage

Help with the repair or replacement of your vehicle will be provided if you collide with another car, a fence, building, etc. It’s an optional component in most stated unless required by the lender of the vehicle.

Medical Payments Coverage

If any of the participants of the accident from your side are injured, this component of the insurance plan will help you handle medical costs like X-rays, surgeries, and visits to the hospitals due to other reasons.

Personal Injury Coverage

In addition to other participants’ bodily injury coverage provided within the liability insurance, you can also purchase a plan for your own personal injury protection (PIP). Unfortunately, it’s only available in some states. It can help you pay for medical bills if something happens during the accident. PIP is mandatory in some states.

All these components are available, and even if they aren’t mandatory in your state, it’s worth considering purchasing all of them. Just choose a reliable company that will explain to you every step from choosing a plan to signing the agreements and using the services.

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