What Types of Car Insurance Are There and What Do I Need?

Getting insurance for the first time can bewould be covered under your collision insurance
confusing. There are so many questions to bepolicy. This covers all damage over the deductible
answered, not the least of which is "What typesamount up to the policy limit, unless it was caused
of car insurance are there?" It is a valid question,on purpose. i.e. you can't run your brand new
especially for the young driver, who has onlySL-550 into a pole because money's tight and you
limited experience in automobile related matters.need a quick $80,000. The company will
There are many different types of insurance, butinvestigate, then they will deny your claim and
only a few common ones. Below are the majoryou'll be left with a sore neck and a wrecked
types of car insurance you'll find when looking forMercedes.
a policy. In most cases you and up getting moreComprehensive Insurance -
than one type, because they cover differentComprehensive covers damage to the insured's
things.(most likely you) vehicle caused by something
Liability Insurance -other than collision, such as natural disaster, theft,
In all but 2 states you'll be required to getor vandalism. When hail damages your car in the
insurance as a condition for driving a car. The fearbig storm in the spring, you'll file a claim against
is that you'll cause someone bodily harm oryour comprehensive policy. Again, you'll first have
damage property and be unable to pay for theto satisfy the deductible.
medical expenses or the cost of repairing orIt is also smart to check the policy to make sure
replacing their property. That is the basis forwhat is covered and what is not. Sometimes
liability insurance.certain events or aftermarket add ons to your
If insurance is required in your state it will becar may excluded under the terms of your policy.
liability insurance. If you cause an accident, yourGo over this with your agent to be sure.
insurer will cover the damages. Typically, youUninsured Motorist -
must pay a portion of any claim paid out by yourSometimes you'll be involved in an accident that is
company. That is the deductible amount, which isnot your fault, and the person at fault has no
normally between $100 and $1,000.insurance. In this case you can turn to your
If for example, you're involved in an accident, youuninsured motorist policy to reimburse you for
cause $5,000 damage to the other vehicle, andyour damages. This is not to be confused with a
you have a $500 deductible, the insuranceclose relative, under insured motorist insurance.
company will pay $4,500 toward the cost ofUnder insured motorist, as the name suggests
repairing the other vehicle. You'll be responsible formakes up the difference between the fault
the $500 deductible.party's coverage limit and the actual damage,
The higher deductible earns you lower rates formshould there be a difference.
your company. Most kinds of insurance have aSay for the case of argument, you are in your
deductible associated with them. Liability policiesbrand new Honda Accord EX, and get hit by a
have different limits for property damage anddrunk in a '78 Suburban. If his property liability limit
medical injury. Usually you'll see this on your policyis only $15,000, you may be left holding the bag
statement as large numbers separated byfor the difference between the $15,00 his policy
slashes, such as Bodily Injury 50,000/100,000. Thiscovers and the cost of your repair. That is where
indicates your coverage limits for each person andan under insured motorist policy steps in.
the total limit for the policy. There will also be aThere are the main types of car insurance there
property limit; normally between $25,000 andare. When you shop for insurance, you'll want to
$100,000.carefully weigh the amount of coverage you need
Collision Insurance -of each type, if any, then set out to get your
What about the damage to your car that occursbest deal from a reputable company.
in the above example? Damage to your vehicle