Insurance Tidbits

Did you know there are approximately six (6) different types of car insurance? Most people do not take the time to investigate the various types of car insurance coverage and only look for the most reasonable rate they can afford. Most states require the driver to carry a basic automobile insurance policy that only covers liability. If a person is buying an automobile, the law can require a buyer to add collision coverage to their insurance policy (if there are damages to another vehicle, liability insurance covers damages to the other party’s vehicle, and collision covers damages to the insured party’s vehicle).

The most common reason to have automobile insurance is to cover the replacement of an expensive asset. If an automobile is damaged, the policy holder may want to repair or replace the vehicle. Automobiles can be expensive and if it is damaged in an accident; he or she may want to be able to repair or replace it. Here’s the catch: there is more to automobile insurance than just covering the car itself.

Most, but not all, automotive insurance policies cover injury to a person involved in an accident and/or the death of another person in an incident when you are legally responsible. The policy may pay for medical expenses related to the incident, it may also cover legal defense costs. Car rental coverage on a policy may be included in case an accident leaves you with an undriveable vehicle. The more coverage on a policy, the rates will increase.

There are several insurance types a person can combine to find the best coverage. Some types of insurance are required by the state in which you reside; therefore, it’s important to check out the state’s regulations for automobile insurance. There are several basic types of insurance that apply to specific events that can affect a damaged vehicle, or special needs a person may have who has been involved in an accident.

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