Whether you already own a car or you are looking to buy one, you are probably aware that you will need auto insurance. While specific requirements may vary depending on the state, almost all 50 states require some sort of liability coverage. The only exceptions are New Hampshire and Virginia, where car insurance is not mandatory for all drivers but you will still be held responsible for bodily injuries or property damage in case of an accident
Auto insurance can have different types of coverage and that’s where many people get confused. Before getting car insurance, it’s important to check your state’s minimum requirements. On top of those, you can add additional optional coverage.
Here are all the car insurance coverage options.
Main auto insurance coverage types
Depending on the state, some of these coverage options are mandatory while others are optional.
There are two categories within this type of coverage – bodily injury liability and property damage. If you cause an accident, this covers for bodily injuries suffered by the other driver or any passengers as well as damage to any property of the driver and/or passengers. This coverage is mandatory in most states.
This coverage is for physical damage to your car in case of a crash, be it with another vehicle or an object such as a tree or a fence.
Uninsured/Underinsured Motorist Protection
This policy helps cover costs resulting in an accident caused by a driver without insurance (uninsured) or that has an insurance that doesn’t cover all required costs (underinsured). This coverage is mandatory in some states and optional in others. This coverage also applies if the other driver flees the scene.
This kind of coverage is usually the next step after the minimum coverage required by law. Comprehensive coverage is meant to ensure your vehicle against damages not caused by an accident, such as fire or theft. This policy includes windshield coverage, deer accidents (or other animals), hail damage, fire damage, theft, vandalism, flood damage, and fallen tree damage.
Personal Injury Protection
Briefly PIP or No-fault coverage, this type is only available in some states. PIP coverage helps cover any medical expenses following an accident as well as related costs such as loss of income following the accident or child care expenses.
Medical Payments Coverage
Add this coverage if you want the insurance to cover the cost of medical treatments for you or passengers in your vehicle in case you cause an accident.
Full Coverage Auto Insurance: can include some or all of the above. This type of insurance usually contains liability, collision, and comprehensive coverage, while the rest may or may not be included depending on the policy you choose.
Additional optional coverage
Even full coverage auto insurance doesn’t cover all the possible costs related to an accident or other car issues that may occur. The following are other types of optional coverage that you can buy on top of your full coverage.
- Gap Insurance: useful if you are taking a loan for a big portion of the car’s value. If at the time of an accident you still owe more than the current value of the car, you would need to cover the “gap”.
- Towing and Labor Insurance: includes towing and other services like a tire change or gas delivery to mention a few.
- Car Rental Coverage: covers the expense of renting a car while yours is being repaired following an insurance claim.
- OEM Endorsement: allows you to get OEM (original equipment manufacturer) for repairs.
- Full Glass Coverage: covers for glass damage. It’s included in comprehensive coverage but can be useful if you have a high deductible.
Vanishing Deductible: offers a discount on your deductible for every year of safe driving.