Explain The Common Types of Auto Insurance Policies

Auto insurance policies are one of the most important policies. All drivers are required to have some auto insurance for their vehicle. If you are buying a new car or looking to insure your vehicle, you should know about the many types of auto insurance policies and what they cover. Here is a list of the most common types of auto insurance policies:

Liability Coverage

Auto liability insurance is compulsory in most states of the US. It is a legal requirement to have the minimum amount of liability coverage at least. It helps to cover injuries as well as property damage. Liability coverage has two components:

• Bodily Injury Liability – This helps to pay for the other person’s injury if the accident was your fault.
• Property Damage Liability – This covers damages caused to the other person’s property.

Collision Insurance

This type of auto insurance covers any vehicle damage following an accident with another vehicle. It helps with repairs or replacement. Collision coverage is usually not mandatory. Your insurance for leasehold or lender may require it.

Comprehensive Coverage

Comprehensive coverage provides an extra layer of coverage for your car. It helps to cover your car for other things as well like vandalism, extreme weather events, and animal accidents.

Uninsured Motorist Policy

Uninsured motorist policy is meant to protect your vehicle and you against any uninsured driver, mostly in hit-and-run accidents. It usually is combined with underinsured motorist policies. This policy will help pay your medical bills and also the repair of your vehicles in some states. This auto insurance policy is mandatory in some states of the US and optional in some others.

Underinsured Motorist Coverage

Like mentioned above, this policy may sometimes be combined with uninsured motorist coverage. Sometimes, drivers may have the minimum liability coverage, which may not be enough in major accidents where injuries and damages are severe. If you are in such a situation, the underinsured motorist coverage will protect you.

Medical Payments Insurance Policy

Injuries in the aftermath of an accident can lead to huge expenses. The medical payments policy can help handle the cost of medical treatments, irrespective of who was responsible for the accident.

Personal Injury Protection Coverage

The personal injury protection coverage or the PIP is available only in select states. Similar to the medical payments coverage, it covers your medical expenses. It can cover up to 80% of your medical expenses, depending on the limit. It can also cover other expenses like lost income and child care expenses.

Gap Insurance Coverage

Gap insurance is an optional car insurance coverage. It helps drivers pay off their auto loans if the car is totaled in an accident or stolen. You can purchase this insurance coverage only if you are the original loan or leaseholder on the vehicle.

Towing or Labor Insurance Policy

A towing or labor insurance policy is a very common add-on to your auto insurance policy. As the name suggests, it helps cover the towing and labor cost for your vehicle in case of a breakdown or other problems like flat tires and dead batteries. This type of insurance policy will cover the towing, jump starts, tire changes, oil or gas delivery, and lockout assistance. This policy’s labor cost refers to the labor charges you need to pay for any of the services mentioned above.

Rental Reimbursement Policy

A rental reimbursement coverage comes into the picture when you have to rent a car or use public transport while your car is repaired after the accident. This policy will cover the transportation expenses for the rental car or pay for your public transport. This policy is applicable only if your car was damaged in the accident. It cannot be used if your car is undergoing routine maintenance.

Classic Car Coverage

Classic car policies are for owners of classic or vintage cars. They usually offer a larger reimbursement in the event that your classic car is damaged. However, this type of auto insurance policy also comes with a variety of restrictions and regulations. Make sure to read the policy documents carefully and get your doubts clarified before purchasing the policy.

It is important to be well-informed about the different auto insurance policies before purchasing one for your vehicle. If you live in Hanover and are looking for automotive insurance companies in Hanover, PA, contact Miller Hanover Insurance. We offer different types of auto insurance policies and will guide you through your auto insurance journey.