Basic car insurance is often referred to as liability insurance. Basic insurance is also called minimum coverage or liability insurance. This type of policy is cheaper and has fewer benefits than a full coverage policy. The six types of car insurance are liability insurance, collision coverage, comprehensive insurance, coverage for uninsured motorists, MedPay and the PIP.
The main point to keep in mind with liability insurance is that it won't cover your damages or injuries if you cause an accident. If another person is found to be at fault for an accident, that person's liability coverage or their PIP will cover the damages. Almost everyone should have liability insurance, as required in almost every state. Only drivers in New Hampshire and Virginia can be excluded from liability coverage, but that is never recommended.
Whether they're driving new cars or old vehicles, all motorists must have liability insurance to drive legally and avoid paying out of pocket for expensive repairs to other vehicles. Collision insurance covers repairs or replacement of your vehicle after an accident. Also, take care of your car after a hit and run, or if you hit a tree or fence. However, don't expect collision coverage to apply to damage caused by incidents unrelated to accidents or medical bills.
No state requires drivers to have collision insurance. The key difference between this optional coverage and mandatory liability insurance is that collision insurance applies to your car and not to other affected vehicles. It's smart for all drivers who can afford collision coverage to have this type of car insurance. Repair costs are often expensive after a car accident, and collision insurance allows many drivers to cover the costs of repairing their vehicles.
Only drivers who can't afford coverage higher than the minimum should consider avoiding collision coverage. Keep in mind that this type of coverage is required for most drivers with a car loan or lease. Comprehensive insurance is optional in all states, although lenders and leasing agencies often require this coverage. Exclusions from this type of car insurance include vehicle repairs and medical bills after a collision.
Twenty-one states and the District of Columbia require drivers to have coverage for uninsured drivers, while 13 states require coverage for underinsured motorists. The table below lists the locations that require these types of car insurance. Drivers must have coverage for uninsured drivers in the states listed above, but even those who live in other states may want to purchase this type of car insurance. It's a smart choice for those who couldn't afford damages if they were hit by an underinsured or uninsured driver.
MedPay and PIP could cover your medical expenses in this situation, while collision insurance could handle repairs to your car. Drivers who choose not to participate in those coverages may want to get uninsured motorist coverage instead. Does not require liability insurance against bodily injury. The three main types of car insurance are liability insurance, collision coverage, and comprehensive insurance.
Liability insurance covers damage caused to other people, while collision coverage and comprehensive coverage take care of the repairs that must be done to your car. Basic car insurance is known as liability insurance and consists of two main parts:. Bodily injury liability insurance covers other drivers' medical bills in an accident where you are at fault, while property damage liability insurance covers damage to your vehicle. The five basic types of auto insurance are liability insurance, collision coverage, comprehensive insurance, coverage for uninsured motorists, and medical payment coverage or personal injury protection.
The Guides Auto team has carefully reviewed the best car insurance options in general, and we'll explain the importance and usefulness of each type of coverage. In about half of the states, a basic auto insurance plan would also include coverage for injuries or for uninsured drivers. New Hampshire residents can avoid buying insurance if they show that they can financially pay for damages after a car accident. The three main types of car insurance are liability insurance, collision coverage, and comprehensive insurance.
The minimum car insurance required in your state determines what your basic auto insurance policy includes. Medical payment coverage, often referred to as MedPay, covers certain medical expenses, funeral costs, and health insurance deductibles for motorists who end up in car accidents. This type of car insurance is required in every state except New Hampshire and Virginia, although each location sets its own limits of liability for minimum coverage. While other types of car insurance can be found, the above are some of the most valuable options for motorists who want to get more coverage.
Basic car insurance may be sufficient if you have an old car that isn't worth much, are comfortable with minimal coverage, don't drive much, or are a young driver with high rates. Coverage for uninsured or underinsured drivers will pay for medical bills and repairs on your vehicle if you are hit by someone driving without car insurance. State law requires residents of the locations listed above to have PIP insurance, but others may also want to consider this type of car insurance. USAA has strict eligibility requirements, so not all drivers will be able to purchase car insurance with this provider.