Insurance policies are covered by various laws the state issues. The available insurance policies in one state may be different in the insurance policies offered in another. A car insurance policy is composed of sections which describe each type of insurance policy that the insurance company recommends. Your auto insurance policy basically just gives you important information about the types of insurance policies the company offer.
There are about 6 types of insurance policies that insurance companies commonly offers. What each insurance policy does is discussed below.
- The liability insurance policy covers for injuries or damages a policy holder may cause during an auto accident. For example, when a policy holder accidentally hits another car while he is parking, the insurance policy which covers for the repairs of the hit car would be the liability coverage. When the policy holder’s car is damaged or when the policy holder himself is injured during an accident caused by him, the liability coverage would not be held responsible for the repairs and the hospital bills of the policy holder and his car.
- When a policy holder is involved in an accident that is not his fault the insurance coverage that will pay for his medical expenses and if ever, his lost wage, would be the personal injury protection. This coverage is however available only on some states.
- The insurance policy that will pay for the medical expenses of a policy holder whether the accident was his fault or not is known as the medical payments insurance policy. This coverage is often limited to a certain period of time. Usually, this only applies for 3 years.
- When a policy holder is involved in an accident wherein the accident is caused by a driver without any insurance policy or with an insurance policy but is insufficient the, policy that covers for the policy holder is called the uninsured or underinsured motorist coverage.
- The collision coverage is the insurance policy which covers for the repairs of the policy holder’s car wherein the damage on his car is due the car colliding with another car or hitting another object like a fence, a wall or a tree.
- When the policy holder hits an animal the comprehensive coverage covers for the damage on the car. This insurance policy however typically covers for damages on the policy holder’s car which is caused by other reasons except collision such as fire, hail and flood.