5 Types of Car Insurance You Should Have

car-insuranceYou would think getting car insurance coverage should be easy. With so many insurance companies, types of coverage, and legal requirements, finding the best car insurance can be quite challenging. There are a few basic types of insurance coverage you should consider. We’ll explain these here to help you better understand what to shop around for without getting overwhelmed in the process.

The five most important types of auto insurance coverage to purchase include:

1. Underinsured/Uninsured Motorist Coverage

If you are in a car accident, and injured, this type of coverage will cover your medical expenses. It kicks in when an at-fault driver has no insurance. Perhaps they are insured, but their policy doesn’t cover the damages you have sustained as a result of their actions or negligence. Underinsured, uninsured motorist coverage will also cover your losses if you’ve been in a hit-and-run accident and cannot hold the driver responsible. In any case, it avoids having to pay out of pocket for medical or repair bills.

2. Med-Pay Insurance

Covers the medical expenses incurred for treating and rehabilitating injuries you sustained in a car accident. It doesn’t matter who is at fault; you are still covered. Med-Pay insurance may also cover injuries a pedestrian or bicyclist may suffer after being hit by a car, as well as dental care. It could also cover funeral expenses. Speak to your insurance agent regarding the fine details of medical payments coverage, as different auto insurance companies include various types of benefits and impose different kinds of restrictions.

3. Liability Coverage

If your insurance policy includes liability coverage, your insurer will pay for another party’s medical expenses and property damage if investigators determine you are at-fault for the accident. The policy may even cover legal fees if car accident lawyers are involved during a lawsuit. Most states require drivers to have a minimum amount of liability insurance coverage. Liability coverage is divided up into two parts—bodily injury and property damage liability coverage.

4. Collision Insurance

The cost of repairing a car after an accident can be very high. Collision coverage pays for damages to your vehicle if you are in a crash. If the cost of repairs exceeds the value of your car, the policy covers a value equal to that of your vehicle. You can therefore afford to replace it. A collision insurance policy is especially useful if you’ve recently purchased an expensive car and it is damaged in an accident.

5. Comprehensive/OTC Coverage

A comprehensive or Other-than-Collision (OTC) insurance policy covers damages caused by theft or a natural disaster, such as an earthquake, fire, hailstorm, or a tree falls on your car.  A downside is comprehensive coverage is expensive. It may be unnecessary if you can replace your vehicle easily, and the events covered are extremely unlikely to happen. If you don’t live where there are too many trees, you may not need OTC coverage.

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Car accidents can have devastating, and expensive, consequences. Aside from property damage and medical costs, and a lack of earning capacity, there are legal costs to consider.We provide legal funding in Los Angeles & all of California. We have no hidden fees; and you pay us back only if your lawsuit wins.

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