Know The Various Types of Auto Insurance and Why You May Need Them

Various Types of Auto Insurance

If you are getting ready to start looking for a good deal or price for auto insurance, you first need to make sure that you are well aware of just what kind of insurance you need.

If you were not already aware, there are a few different types of policies that you need to be aware of so you can make the best choice for your financial and personal security.

Know Different Types of Auto Insurance.

Liability Insurance

This is the minimum coverage that drivers can opt for when they reside in a state that requires at least minimum coverage. There are a few states that do not enforce the rule of auto insurance, but the majority of the states do. With this type of auto insurance, you will be financially protected when needing to cover the expenses of another person that was involved in an accident that was your fault. For example, your liability car insurance coverage will cover the repairs to their vehicle, but not to yours.

Uninsured And Underinsured Motorist Insurance

So, what happens if you are involved in an auto accident and the fault is not yours? Generally, the at-fault driver will have their insurance company, who will pay for the repairs to your vehicle and for any medical care that you may need as a result of the accident.

However, if you live in a state that does not require motorists to maintain an insurance policy, or you were hit by a driver that was not carrying the insurance that they were legally obligated to carry, you might be out of luck.

You could always try to sue them in court, but there is a good chance that if they were not able to afford to maintain their auto insurance policy, they will probably not have a lot of money to pay you through a court order. This is why there is the uninsured and under-insured motorist insurance that you can add to your current policy. This way, no matter what happens, you can rest easy knowing that you will be taken care of.

Gap Insurance

There are a lot of people that find themselves assuming that gap insurance is not something that they need to invest in because they have full coverage insurance. While it is true that should you total a vehicle that you are purchasing or leasing, your full coverage auto insurance company will send a check for the total value of the vehicle should it be deemed totaled.

The thing is though, the amount you owe on your lease or purchase agreement may be a lot more than the current value of the vehicle. You would be stuck having to pay the difference between the insurance check and the amount that you owe.

However, if you have gap insurance, that would no longer be an issue to worry about. This type of insurance fills in the gap of coverage, which means you will be able to free yourself from a stressful financial obligation if your vehicle were to become totaled.

While there are other features or policy additions that you might want to add to your personal auto insurance policy, you should have a much better understanding of the type of insurance you want to get.

If you currently have an insurance policy, but feel as though it is no longer enough to cover your needs, you will simply need to get in touch with your insurance agent, discuss some options that are available to you, and officially change your auto insurance policy.


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