6 Basic Types Of Auto Insurance Policies And The Extent Of Their Coverage

The basic types of car insurance available in the market are as follows: physical Damage, bodily injury liability, property damage, medical payment, uninsured motorist bodily injury, and underinsured motorist bodily injury.

Auto insurance comes in various packaging, which ranges from simple coverage to all-inclusive protection. Since each person has different needs, having several policies available is a convenient way of choosing the most suitable for you. Here are some of the basic types of car insurance available such as:

Physical damage

Sometimes referred to as the "Comp and Coll", this covers physical damages brought on your vehicle, which are of two types namely: comprehensive and collision. Comprehensive coverage or sometimes referred to as the Other Than Collision (OTC) is a good policy to choose. However, its cost is a bit expensive since the extent of protection is very broad, which includes stolen vehicles, damages caused by fire, vandalism, flood, and the likes excluding collision. This is ideal for vehicles that are newly bought, obsolete vehicles that need to be replaced, or if the financing company requires you to get one. On the other hand, collision type from the word itself means damage that result from accidents. You can use this to pay for the damages of your own car and or other person's car.

Bodily injury liability

Intended to cover loss of income, medical bills, suffering, and the likes; bodily injury liability provides funds to pay other people who have been injured during the accident. In some cases where the person concerned files a case against you, this can be used to pay for legal assistance. Although this could be a great help, but you and your car are excluded from the protection.

Property damage

This type of insurance covers the properties that you might have caused damage to after a vehicular accident. It could be another person's car or a house depending on the location of the accident. If a lawsuit is filed against you, the amount can be used to defend yourself in court.

Medical payment

In case there are other persons harmed during the incident aside from you, this insurance can help you finance medical expenses. Regardless of who is at fault, the policy holder as well as their family members are covered even when they are only pedestrians and not passengers.

Uninsured motorist bodily injury

If the accident is caused by uninsured driver, this policy can protect you and the other passengers to pay your hospital bills. Hit-and-run victims can also benefit from this type of coverage.

Underinsured motorist bodily injury

Persons who are covered by this policy include the driver, policy holder, and other passengers present at the time of the accident. This is applicable when a person with inadequate insurance met an accident, caused death, and injuries to any of the abovementioned casualties.

Although having an insurance is a good way to protect oneself, it still best to take extra care when driving to avoid meeting and accident.