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Coverage Guide

When it comes to buying auto insurance, there are many different options available. So how do you know which one is right for you? Choosing the right plan is one of the most important steps toward receiving low car insurance quotes. By understanding the different types of insurance available, you can get a better idea of what plan to choose.

Comprehensive Insurance

Comprehensive insurance will protect you from any damage or loss, no matter what the situation. Comprehensive insurance coverage will pay for losses due to natural disasters. In fact, it covers pretty much everything imaginable—except collisions. In most states, this is an optional insurance coverage option.

Liability Insurance

Liability insurance covers property damage and bodily injuries that you may cause other drivers.  Essentially, it protects you, the insured, from liabilities caused by lawsuits or claims that fall within the coverage of your insurance policy.

Liability coverage usually has two different components, and they are often bundled together—bodily injury insurance and property damage insurance. Bodily injury liability insurance coverage protects you if you are found to be at fault in a traffic collision and covers personal injuries experienced by you or your passengers. If you are in a collision, and are found to be at fault, then property damage liability insurance will cover you in case of damage to the other party’s property or vehicle. 

Collision Insurance

Collision Insurance insures you and your car against collision damage caused by hitting another car, hitting a movable object, or a collision caused by road hazards. There are two different types of collision insurance coverage that you may purchase.

The first kind of collision insurance plan is a replacement-cost coverage plan. In this instance, if you are in a collision, you will be given enough money to buy a replacement car of the same value as the one the one that was damaged. This implies same make, model and year. The second form of collision insurance plan merely provides cash value coverage in the event of a collision. As you might guess, the first plan is usually more expensive. However, if you do get into an accident, it may be worth it.

No-Fault Auto Insurance

No-fault auto insurance coverage helps to recover any losses that you and your vehicle might endure during a collision or accident, no matter who is at fault. This type of insurance can be greatly helpful if you are hit by an uninsured driver who cannot afford to pay for damages out of pocket.

No-fault insurance lowers premium costs, because it helps to counter expensive litigation when an accident takes place. It also provides relatively quick monetary relief to those with bodily injuries.

Personal Injury Protection (PIP)

Personal injury protection provides coverage for any injuries or healthcare costs that result from a collision or accident. In some states, having PIP is a mandatory, although this form of coverage varies in what it covers from state to state.  In some states, insurance carriers will pay for the total of your loss, no matter who is at fault, and then subrogate the payment from the liable party.

Having PIP is a good idea, because it helps to alleviate your immediate needs, while the details of the liability and payment are managed by the two insurance companies.

States with mandatory PIP include: Delaware, Florida, Hawaii, Kansas, Kentucky, Massachusetts,   Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, Pennsylvania, Utah and   Washington.

Uninsured/Underinsured Motorist

Uninsured or underinsured motorist coverage will protect you from the cost of bodily or property damage in the event that you are in a collision with an underinsured, or uninsured, driver. If a driver does not have adequate insurance, you will still be compensated. If you are a regular driver, or even a part-time driver, it makes sense to have uninsured and underinsured motorist protection as well as regular coverage.

Physical Damage Insurance

This type of insurance covers you if your car receives any sort of damage that might occur, outside of everyday wear and tear. 

Guaranteed Auto Protection

GAP Insurance, also known as loan/lease payoff coverage, will protect you from financial burden if your automobile is destroyed before you have finished paying off your car loan. Many insurance companies will allow you to buy GAP insurance at any time during the term of your lease, although generally it is purchased at the time of lease. Leasing contracts typically require that you have collision and comprehensive insurance.

Depending on your insurance company, you may have to pay loan payments after your car has been destroyed in order to counter-balance or compensate for the amount paid by the insurance. A GAP insurance policy can help protect you in a case like this.

Rental Car Insurance

Rental car insurance is extremely important to have if you are planning on renting a car. It will provide you with protection from financial liability if you are involved in any kind of collision or accident while driving the rented car.

Pay-Per-Mile Insurance

Also known as pay-as-you-drive (PAYD), this insurance plan lets you pay based on how many miles you drive. For some drivers who use their automobiles sparingly, it can be a good financial choice.