Car Insurance Coverage Categories

Car Insurance Coverage Categories
23 Jan 2016

A comprehensive vehicle insurance policy will have several possible coverage categories. Below you find the categories of liability coverage, collision coverage personal injury protective coverage and comprehensive coverage. In addition to explaining what the types of coverage are for, we’ll also discuss the amount of coverage that you should think about getting.

1) Property Damage Liability Coverage

Property Damage Liability Coverage covers damage caused by you or somebody else driving your vehicle. Instead of paying for medical and other damages to people, though, this covers damage to others’ property. While this usually refers to damage to another car, it could apply to some other person’s property.

How much Property Damage Injury Insurance should you have? Your state will mandate the minimum coverage amount you need to have and you might want a higher level. If you had only $20,000, for example, and you totaled someone’s brand new vehicle, that amount probably wouldn’t cover it. You’d need to pay for whatever damage the insurance was unable to cover.

2) Personal Injury Protection Coverage

Personal Injury Protection (PIP) Coverage is another kind of coverage. This is not available in all states. Generally states with no-fault car insurance laws do not allow you to buy PIP. Usually, this coverage provides medical (or funeral) expenses for the driver and other people in the vehicle that’s insured in the event of a crash. It also covers pedestrians hit by the insured vehicle. PIP is different in most every state so you will have to educate yourself on your state’s laws.

3) Collision Coverage

Collision Coverage covers you for damage to your vehicle if it collides with an object or other vehicle. Lenstolerhyundai.com explains that this is designed to get the vehicle repaired, or replaced if your car is totaled (more damage done than the vehicle is worth). Unlike liability insurance, this is not mandated by states, however, if you have a loan on the vehicle, or if it’s leased, you will almost certainly have to get this coverage.

What should you get for Collision Coverage? If you don’t have a loan for your vehicle and it’s an old-ish model, you may want to consider just covering it to the blue book value. If your car’s value is low, you may want to consider skipping this coverage. That is because if your vehicle was totaled the insurance company would pay you up to the vehicle’s blue book value after your deductible is subtracted.

4) Comprehensive Coverage

Comprehensive Coverage covers your car in the event of damage or loss from something other than an accident. This includes vandalism, theft, nature, animals, etc. Just like Collision insurance, it’s not required by law. But if your vehicle is leased or you have a loan you’re not finished paying on it, you probably will be required to purchase it.

How much for comprehensive coverage? The answer to that is the same as for Collision Coverage.  If you have a loan on your vehicle, comprehensive coverage is usually required. If your car is paid off and low value, you maybe don’t need it.

Final Remarks

In addition to the above-mentioned categories, there are other coverage types (roadside assistance, towing, etc.) available with car insurance; they’re all different components that work together to form a comprehensive insurance policy. Knowing as much as you can about your automobile insurance policy and having a good insurance agent will essentially eliminate the risk of owning and using an automobile.

Courtesy of: Len Stoler Hyundai

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Thomas Elliot Young

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