Understanding different types of insurance policies available plays a very important role in making the right decision. Automobile owners should pick the right policies that suit their individual needs apart from the policies that are mandatory. Every state has different requirements for the insurance policy and has several policies as mandatory ones. Insurance prices vary greatly from state to state, depending on the minimum requirements. Here are some of the basic types of coverage that are available:
Liability insurance:
This insurance is the most common one that is mandatory in most states of USA. A driver should purchase liability insurance even if it is for a rental car. Liability insurance does not cover the policy holder’s automobile if there is an accident and damage to the car. It covers the other party’s automobile when there is a collision.
Auto collision insurance:
Collision insurance covers the policy holder’s automobile in the case of an accident or a collision of any sort. It covers the cost of automobile repair and replacement of damaged parts even if it is the fault of the policy holder, irrespective of the other party’s liability insurance.
Comprehensive insurance:
This insurance provides coverage against natural disasters like hurricane, earthquakes, damages due to vandalism, fire damages, and damages due to weather conditions like snowstorm, rainstorm, hailstones, and any such unforeseen incidences. It also provides coverage against theft of the vehicle, and any other kind of damage or stolen parts of the car.
Medical or injury protection:
This insurance covers all the medical bills in the case of an accident, for any treatment received. It also provides the medical bill coverage for the other party involved in the accident if the policy holder is at fault. Medical liability is a mandatory requirement in most states of USA, to keep the drivers safe on the roads.
Uninsured driver’s protection:
This insurance provides protection for the driver in the case of an accident, even if the other party does not have a liability insurance coverage. Many drivers drive without having the mandatory liability insurance and buying this coverage will protect against such occurrences.
Although most of these policies are optional, it is important to consider carefully and structure a plan that keeps the driver and the family safe on the road. The mandatory insurance is mostly liability and if the other driver does not have it, it is a problem. It is always better to buy an insurance package at a company to obtain the best prices.
