Types of Auto Insurance

Auto insurance is required – so it is something we need. There can be no argument made about this. However, just how much you need and what you will need it for are very serious considerations when taking out auto insurance.

There are three basic categories when taking out auto insurance. There is coverage for the person operating the car (and anyone who would potentially use it). Then comes the insured vehicle and after that any third person with whom you might be involved in n accident (usually the other car).

Liability Cover is what the driver of the vehicle would pay if they were involved in an accident or due to other negligence. An example is someone driving into a mobile phone transmission tower. The liability damage would cover the cost of the transmission tower and any damages due to loss of service that the owner could claim.

You can have combined or split limits – combined limits for liability covers both bodily and property damage under a single dollar amount, whereas split cover gives separate amounts to both options.

Which type you would want to use is down to personal preference, but generally if you want to be sure split coverage is the best. This way if you damage property, the cover for personal damage will not be affected and should you need it in the future it is safe-guarded.

Collision Cover is for when your vehicle is involved in an accident and needs to be repaired. There will be a deductible amount that needs to be paid before the insurance will kick in. Collision cover is optional and need not be taken. However, one crash could set you back thousands of dollars in repairs and if you are able to afford it, then you should take it. Also, collision damage only covers damage to the insured’s car by another person’s car.

Comprehensive Cover is the name for the cover that pays you in event of non-accident damages. Many people would rightly think that a collision with an animal would come under collision coverage, but it is only applicable to Comprehensive. Also, theft, attempted theft, fire, weather and vandalism are all covered by comprehensive cover. Make sure you ask your auto insurance company exactly what you can expect from the comprehensive cover they offer you. It would be silly to pay for animal collisions if you live in a suburban area, far away from any roving animals.

Loss of Usage cover is also known as rental cover. It covers the rental of another vehicle while you are waiting for your insured vehicle to come back from repairs.

Road Assistance Coverage is also know as towing coverage and is perhaps the most important coverage that many feel they can save on. Towing around a city might not be too expensive, but consider the cost of being stranded on the interstate, far away from a service station that could fix your car. Take this from someone who has a lot of experience with towing, it could save you more in the long term than any other option here.

Overall, you should be aware of what you are buying and how you are able to use it. If you decide on leaving out one of the above-mention options, at least you should know what you will need to pay out of your own pocket instead of only knowing when you are in trouble – the time you least expect it.

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