Types of Auto Insurance Coverage Explained – Liability, Comprehensive, Collision, PIP, Uninsured

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There are many options when it comes to auto insurance. Each coverage covers different things so it is important to choose the right coverage for you. We will talk about each option to help you make an informed decision when buying your coverage.Liability

Liability insurance is the most important type of insurance. In most states and provinces it is required that you have at least a minimum level of liability insurance. Although it does not directly cover you, liability protects you against financial loss that could result from an auto accident. If you are found to be at fault for an accident, liability coverage will pay for the medical costs and property damage you cause. It can be divided into two parts in the United States: property damage and bodily injuries. You are not covered for bodily injury. The insurance covers the injuries sustained. You will need to have another type of medical insurance (PIP). These two elements are called liability in Canada. It does not cover injuries you sustain as a result of an accident. There is an auto insurance minimum that you need in both Canada and the USA. It varies by province and state. These minimums can be increased and it is highly recommended. If the damages exceed your liability, you will be fully responsible for the difference. This could lead to several thousand dollars in damages.Comprehensive

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Comprehensive insurance does not cover your car. Comprehensive insurance covers damage to your vehicle that is not caused by another motorist. These damages include fire, theft, vandalism and damage caused by acts of God such as hailstorms, tornadoes, hail, floods and ice storms. You are also covered if you run into a deer or another animal. To help prevent fraudulent claims, there is a deductible. The deductible can be set at $250 or 500 dollars, or $1000. You must pay this amount to your insurance company before they settle your case. Your premium will be affected by the amount of your deductible.Collision

Collision coverage protects your car if you are in an accident that is not your fault. This includes hitting another motorist or an object (light pole, mailbox, etc.). The coverage will pay for the repair of your car. As with comprehensive, there can be a deductible as high as $250, $500, or $1000. This insurance is optional and will not affect your insurance premiums.Personal Injury Protection (PIP) insurance

PIP insurance is not available in the United States. It is mandatory in certain states, but not all. PIP insurance covers your injuries. The states where this coverage is mandatory are called no-fault. Because no-fault states are considered to be no-fault, all injuries are covered regardless of fault.Uninsured Motorist

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Uninsured motorist insurance protects you if you are in an accident where the at-fault driver doesn’t have insurance. Your insurance company will cover your damages instead of you spending time and money trying to sue the at-fault driver. The uninsured motorist is not exempt from liability. Usually, their insurance company will take them to court to recover the amount they have paid. This type of insurance is required in certain states, but not all. It can be added to insurance policies if desired.

There are many options for insurance when you set up a policy. These policies cover a variety of things, so you should be able to see if you can benefit from them.