There are different types of auto insurance and it’s important to understand them better. By doing so, it will help you to have the right kind of coverage at a fair price. So let’s discuss this further.
The most common type of auto insurance is called liability insurance. This covers against loss arising from an accident or other unexpected situation with the vehicle. If an accident occurs, damage can result to other cars involved. There may also be injury to drivers, passengers or pedestrians.
If this is the case people may require medical attention and care. In addition people may suffer significant financial loss if they are unable to work and support themselves as a result of injury from this accident.
The liability coverage provides money to cover these financial losses. Without this type of insurance, the cost of this would be placed on the responsible party. This could certainly be a devastating situation and one which many people would have a difficult time handling.
So it is very important to make certain that you have an adequate amount of this coverage. There are limits in terms of maximum payout. It can range from a low of $10K to a high of $1M or more.
The cost for this type of insurance can vary depending on the amount of coverage. It is also based on the type of vehicle which is covered. Some vehicles have better safety ratings and may therefore result in lower liability coverage costs than other vehicles.
Another type of auto insurance covers against property damage. In this case it can provide money for structures and other property which may become damaged during an accident. There are limits established which affects the total cost of this coverage.
Other key types of auto insurance include collision and comprehensive coverage. Collision provides coverage for repairs necessary to a vehicle which becomes damaged as a result of an accident. In some cases it may replace the vehicle altogether if it is damaged extensively. This coverage normally has a deductible associated with it. This means that a portion of the repair will be covered by the insurance company with the balance by the policy holder. The deductible typically ranges from $100 to $1,000 or more.
Comprehensive coverage is another type of auto insurance which covers loss against theft or vandalism. It can also cover the cost of repairing or replacing a windshield if it becomes damaged from flying debris.