Vehicle Insurance - What Type Of Coverage Do I Need?
 It is very important to educate yourself
on the different types of vehicle insurance coverage available, as this can help you cut costs and find the most
suitable plan for you. Most states will require that all registered vehicles have some type of auto insurance.
Even if there were no such requirement it is still very important for every driver to give careful consideration
as to what kind of insurance coverage they will need. The U.S. Department of Transportation has estimated that
approximately 10 million vehicles were involved in accidents in the year 2000.
There are many different types of car insurance coverage that one can choose from. Here is a list of the most
common types for you to consider before making your purchase.
Collision Insurance
If you are ever involved in a collision then this type of insurance will pay for any vehicle property damage to your
car.
Liability Insurance
This type of insurance is very important to have if you are at fault in a car accident. It will pay for the
damages that you cause to someone else. There are two types of liability insurance: property damage and bodily
injury. Property damage expenses often include fixing or replacing items that belong to the other individual that
you may have destroyed or damaged. Bodily injury expenses may include: rehabilitation, medical costs, or even lost
wages.
Vehicles covered through liability insurance include:
- Named vehicles – that are listed on the insurance policy.
- Additional vehicles – includes vehicles that the named insured uses as a replacement to the original
named vehicle, as well as additional vehicles that are owned.
- Temporary vehicles – includes rental vehicles used as a replacement for an insured vehicle, that may be in the shop for repairs.
Liability insurance will more than likely cover the following individuals:
- Spouse – they are covered even if they are not named on the insurance policy. Exceptions to this include
couples who do not live together.
- Named insured – includes individuals that are named within the policy. It doesn’t matter what car they drive.
- Individuals granted permission to drive the insured vehicle – does not include someone who may steal your car.
- Other relatives – includes anyone related to the person insured. Either by marriage, blood or even
adoption. Also includes people who may live within the household.
No-Fault Car Insurance
Approximately half of the 50 U.S. States have some form of no-fault insurance coverage. Under No-Fault auto
insurance, the insurance companies of both parties will cover the cost of any lost wages, or medical bills,
regardless as to who was at fault. The coverage is based up to a certain amount. This type of coverage is often
referred to as PIP (personal injury protection).
There are many advantages to no-fault insurance that includes a speedy payment of any lost wages or medical
bills without any arguments as to who caused the accident.
Disadvantages include extremely limited coverage. They don’t pay for lost income or medical bills that are
higher than the PIP limit on each person’s policy. There is no compensation for any emotional distress, pain
and suffering or any other inconveniences. Another disadvantage is that no-fault coverage doesn’t usually cover
any vehicle damage. This is usually covered by your collision insurance, or by the liability insurance of the
person at fault.
Uninsured Motorist Coverage
This type of insurance will pay for injuries if you should get struck by a hit-and-run driver, or by another
individual who does not have any insurance coverage. This insurance is limited normally to bodily injuries and
not to vehicle property damage.
Comprehensive Insurance
Comprehensive insurance pays any vehicle property damage that may include: a break-in, theft or mischief.
It does not cover collision damage.
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