Shopping Around For Auto Insurance? Know What Coverage You Can Get

Are you in need of an auto insurance policy and are shopping around? If so, know that there are actually a few different types of coverage you can purchase, with them all having their own unique benefits. Here are the differences between the various types of coverage options. 

Liability

Everyone needs to have liability insurance since it is required by many states in order to drive. Liability coverage is what pays for the damages that you caused to another person, which include medical bills and personal property damage. However, there are minimum requirements for liability coverage, and you may want a higher coverage limit to protect you from going over those limits.

Collision

The best way to think about collision coverage is that it protects you when you are responsible for causing an accident. If another person is at fault for causing an accident, they would pay for the damages caused to your vehicle. However, collision coverage pays for the damage to your vehicle when you cause the accident. 

Collision coverage will be required when you finance or lease your vehicle because you do not completely own the vehicle. Someone else has a financial interest in the vehicle and wants to make sure that it can be repaired if you cause an accident.

Comprehensive

Comprehensive coverage is what pays for everything else that could happen to your vehicle that is not covered by liability or collision coverage. This includes incidents where someone vandalizes or steals your vehicle, an act of nature that damages your vehicle, or if you were to hit an animal. It will even cover damage caused by flooding and fires.

Personal Injury Protection

Personal injury protection (PIP) coverage is what pays for your financial losses if you are involved in an accident. You will likely have medical expenses that need to be paid for immediately, as well as lost wages while you are recovering from the accident. PIP will even pay for those expenses for passengers who were in your vehicle at the time of the accident since they will have suffered a financial loss as well.

Gap

If your vehicle is totaled, you will only receive the actual cash value of the vehicle. However, your outstanding loan balance may be more than the vehicle's cash value. Gap coverage covers that additional amount so that you can pay off your loan and purchase a new vehicle.

Contact a local auto insurance service to learn more. 

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