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Auto Insurance: What Options Do You Have When Buying Car Insurance

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It can be challenging for a first-time car owner to determine which types of car insurance policy to buy and understand what the different types of auto insurance policies cover. Thus, before deciding on which auto insurance coverage to buy, it is highly recommended to research or ask an auto insurance agent to explain the different policies they offer.

However, it is essential to know that there are two auto insurance types, mandatory/compulsory and optional auto insurance. Here is a description of both types of car insurance and what they cover.

1. Compulsory/Mandatory Auto Insurance

Compulsory auto insurance means that the government requires all motorists to have this type of insurance while driving without exception. There are two types of mandatory car insurance covers, namely Bodily Injury Liability and Property Damage Liability. However, there is an extra compulsory auto insurance called Personal Injury Protection (PIP) cover in some states.

Bodily Injury Liability  When you are at fault for causing an accident, this type of insurance covers the person(s) you crashed into for the following:

  • Medical expenses for injuries incurred
  • Loss of wages while they recuperate
  • Pain and suffering allowances

Thus it is meant to compensate a third party individual when you cause an accident or hit a pedestrian.

Property Damage Liability  When you cause damage to another person's property with your vehicle, this auto insurance covers the costs of the damages. Hence, if you crash into another person's car, a fence, mailbox, or even an electric pole, the property damage liability insurance will cover the cost of the damage you caused.

It is essential to note that the above two auto insurance types do not cover you for bodily injuries or your vehicle's damage. Thus, it is advisable to seek additional insurance coverage from the list of optional car insurance covers.

2. Optional Types of Car Insurance Covers

As the name suggests, optional car insurance covers are not enforced by the law, and thus it is up to a motorist to determine if they want the covers or not. There are numerous types of optional auto insurance. Thus it is essential to choose the ones that are most appealing to you. Here are the four most common types of optional car insurance.

Personal Injury Protection (PIP) — PIP insurance covers you and your passengers against bodily injuries irrespective of whether you caused the accident. Depending on the state you live in, PIP insurance can be optional or mandatory. However, it is highly recommended to have it.

Collision Insurance — Collision car insurance covers the damages caused to your vehicle after a collision. This type of car insurance is highly recommended because it helps cover the costs of repairs to your car.

Comprehensive Auto Insurance — A comprehensive cover provides additional cover for damage caused to your vehicle by an assortment of factors. These factors include vandalism, theft, arson, wild animals, and weather conditions such as hail storms.

Uninsured Motorist Insurance  This policy covers you for injuries incurred and damages to your vehicle when you collide with an uninsured motorist. The policy also covers for hit-and-run incidents where the other motorist can't be found.

To learn more, reach out to an auto insurance provider in your area.