What Are the 8 Types of Car Insurance Coverage?
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| types of car insurance coverage |
8 Types of Car Insurance Coverage
If you are buying a new car or shopping for auto insurance, it is certain that you will need to understand the Types of Car Insurance Coverage
Coverage pays for damages, injuries, and other losses specifically covered by your policy. Read your policy carefully because coverages can vary by policy and company. Pay special attention to the exclusions section, which lists items your policy does not cover.
The front page of your policy called the declarations, or dec, page shows the exact name of your car insurance company, your policy number, and the amount of each of your coverages and deductibles. The following summarizes the eight coverages in the Texas Personal Automobile Policy. Although your coverages and policy terms may differ from these, this summary can help you understand the coverages and the way they work.
types of car insurance cover
1-Liability Coverage (Basic liability coverage meets the state’s financial responsibility requirement.)
What it pays: Other people’s expenses for accidents caused by drivers covered by your policy, up to your policy’s dollar limits. These may include the other person’s:
A- Medical and funeral costs, lost wages, and compensation for pain and suffering
B- Car repair or replacement costs
C- Auto rental while the other driver’s car is being repaired
D- Punitive damages awarded by a court
Liability insurance also pays your attorney fees if someone sues you because of the accident and your bail up to $250 if you are arrested.
Who it covers : You and your family members. Family members include anyone living in your home related to you by blood, marriage, or adoption, including your spouse, children, in-laws, adopted children, wards, and foster children. Other people driving your car with your permission, family members attending school away from home, and spouses living elsewhere during a martial separation might also be covered. You and your family members might be covered when driving someone else’s automobile – including a rental car – but not a car that you don’t own but have regular access to, such as a company car.
2-Medical Payments Coverage
What it pays: Your medical and funeral bills resulting from accidents, including those in which the other person is a pedestrian or bicyclist.
Who it covers: You, your family members, and passengers in your car, regardless of who caused the accident.
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3-Personal Injury Protection (PIP) Coverage
What it pays: Same as medical payments coverage, plus 80 percent of lost income and the cost of hiring a caregiver for an injured person.
Who it covers: You, your family members, and passengers in your car, regardless of who caused the accident.
4-Uninsured/Underinsured Motorist (UM/UIM) Coverage
What it pays: Your expenses from an accident caused by an uninsured motorist or a motorist who did not have enough insurance to cover your bills, up to your policy’s dollar limits. Also pays for accidents caused by a hit-and-run driver if you reported the accident promptly to police.
Who it covers: You, your family members, passengers in your car, and others driving your car with your permission.
5-Collision (Damage to Your Car)Coverage
What it pays: The cost of repairing or replacing your car after an accident. Payment is limited to your car’s actual cash value, minus your deductible. Actual cash value is the market value of a car like yours without damages.
Who it covers: You, your family members, passengers in your car, and others driving your car with your permission.
6-Comprehensive (Physical Damage Other than Collision) Coverage
What it pays: The cost of replacing or repairing your car if it is stolen or damaged by fire, vandalism, hail, or a cause other than a collision. Comprehensive coverage also pays for a rental car or other temporary transportation if your car is stolen. Your policy won’t pay for an auto theft unless you report it to police. Payment is limited to your car’s actual cash value, minus your deductible.
7-Towing and Labor Coverage
What it pays: Towing charges when your car can’t be driven. Also pays labor charges, such as changing a tire, at the location where your car became immobile.
8-Rental Reimbursement Coverage
What it pays: A set daily amount for a rental car if your car is stolen or is being repaired because of damage covered by your policy.