The Different Categories of Auto Insurance You Need


There are many states where auto insurance is mandatory and many states where it isn’t. Most people tend to ignore auto insurance apart from the liability coverage that they are mandated to have by law. However, there are many benefits of having auto insurance, some of which people realize only in hindsight.

Benefits of auto insurance

Auto insurance provides coverage for most of the unforeseen expenses you may incur with your vehicle. More often than not the hospitalization charges and the damage repair costs are way higher than the premiums one might pay. However, people think it wouldn’t happen to them until it finally happens. It is always good to take the precaution. If nothing, you will at least have budgeted something towards your vehicle expenses, instead of sudden expenditure that you might not have planned for. The liabilities costs could be very high, sometimes including damage claims due to loss of work opportunities. Insurance is a good way to protect yourself from all the unexpected costs, irrespective of whether accidents were due to your fault or someone else’s.

Types of Auto Insurance

Anything that gives you anxiety and incurs cost can be insured. There are some insurance policies that are more common than others.

Accident Damage insurance

This takes care of the costs incurred by you when you meet with an accident with another car. If the fault is not yours, then the insurance company ensures that you get the costs from the other party’s insurance company. In some cases, your insurance company can even get you the deductible you might have to pay for the accident damages.

Collision damage insurance

Collision damage insurance covers for all the damage costs incurred due to collision with an immovable object.

Comprehensive coverage

In this form of insurance, you can claim costs of damages due to unforeseen disasters such as cyclones, floods, hurricanes, hail storms, earthquakes etc. Typically the comprehensive coverage covers all scenarios other than an accident. Most of the times, it also includes theft coverage. That is why people tend to get discounts on the premiums when they have anti-theft mechanisms installed in the car.

Travel Insurance and Personal Property Damage Insurance

When you are going on a long road trip with friends or family, it is not a bad idea to insure the trip. In this case, you are covered for any damages due to accidents that might happen during the trip. In fact, the auto insurance can extend further to cancellation insurance in which case, the insurance company will bear any losses you may have incurred due to cancellation of the trip. The auto insurance can also extend to personal property damage which is possible in an accident because on trips you invariably tend to carry personal goods which might be damaged.

Medical Coverage for Passengers

This is a very important insurance that takes care of the hospitalization bill for the treatment in case you have sustained injuries in an accident in the vehicle. This insurance also extends to other passengers of the car travelling under your permission and has sustained injuries in accidents.

Towing and Transportation Insurance

If your car has been damaged in an accident and becomes immobile, this insurance provides the charges for towing it to a service station. In some cases, companies have tie-ups with service stations, so you don’t have to worry about the hassles.