Five Types of Car Insurance Policies

Whether it is your first time buying a new car or you want to change your policy, car insurance is required by law in the state of Nevada. How do you know which type of policy you need? How much coverage should you have? Here are a list of five different coverages you can purchase for your vehicle.

1. Liability Insurance

Liability insurance covers you in the event you are in a covered car accident and it is determined that the accident is a result of your actions. Liability insurance will cover the cost of repairing any property damaged by an accident as well as the medical bills from resulting injuries. Most states have a minimum requirement for the amount of liability insurance coverage that drivers must have. If you can afford it, however, it is usually a good idea to have liability insurance that is above your state’s minimum liability coverage requirement, as it will provide extra protection in the event you are found at fault for an accident, as you are responsible for any claims that exceed your coverage’s upper limit. You wouldn’t want to run the risk of having to pay a large amount of money because your policy limit has been exceeded.

2. Collision Coverage

If there is a covered accident, collision coverage will pay for the repairs to your car. If your car is totaled (where the cost to repair it exceeds the value of the vehicle) in an accident, collision coverage will pay the value of your car.

If your car is older, it may not be worth carrying collision coverage, depending on the value of your car. On the other hand, if you have a more expensive car or one that is relatively new, collision insurance can help get you back to where you were before any damage occurred to your car.

3. Comprehensive Coverage

What if something happens to your car that is unrelated to a covered accident? For example, weather damage, you hit a deer, your car is stolen – will your insurance company cover the loss? Liability insurance and collision coverage cover accidents, but not these situations. These situations are covered by Comprehensive (other than Collision) coverage.

Comprehensive coverage is one of those things that is great to have if it fits in your budget. Anti-theft and tracking devices on cars can make this coverage slightly more affordable, but carrying this type of insurance can be costly, and may not be necessary, especially if your car is easily replaceable.

4. Personal Injury Protection or Medical Payments

While Comprehensive coverage may be something you don’t need to purchase, Personal Injury Protection (PIP) or (MedPay) is something you should. The costs associated from an accident can quickly add up, and in order to cover those costs Personal Injury Protection is available. With this coverage, your medical bills along with those of your passengers will be paid, no matter who is at fault for an accident. It is very inexpensive and worth every penny to have as much as possible.

5. Uninsured /Underinsured Motorist Protection

While state laws mandate that all drivers should be insured, this is unfortunately not always the case. Another issue that can arise is that while a driver may have liability insurance, many states have relatively low minimum coverage requirements that may not be enough to cover all of the expenses of an accident. So, if someone is legally responsible for damages related to an accident, you won’t receive any payment if they do not have coverage or you will receive less than you need to cover the cost of damages if your damages exceed their coverage amount. This is the type of situation where Uninsured and Underinsured Motorist Protection would help with expenses.

Saving tip: It’s usually relatively inexpensive to add uninsured/underinsured motorist protection to your car insurance policy, especially considering the amount of protection it offers. 

If you have any other questions about insurances or if you have been in an accident, call Core Rehab at 702-577-1962 or visit our website at www.corerehab.info.

Source: http://www.21st.com/insurance-newsletters/2012/01/5-types-of-car-insurance-coverage.htm