After buying a car, it’s necessary to determine what type of insurance plan makes the most sense for your situation. Coverage needs can be dictated by your budget, how much you use your car, and the state that you live in. Below, learn about the most important forms of auto insurance.
5 Different Types of Auto Insurance
1. Liability Coverage
This type of auto insurance includes bodily injury liability, which covers other people’s injuries if you’re at fault in an accident. It also includes property damage liability, which covers any damage to other people’s property if you’re at fault in an accident. It is required to purchase in most states. Only in Virginia, where you can opt to pay a fee to the state instead, and in New Hampshire, where you can pay damages in cash bonds, do different rules apply. In Tennessee, however, it’s required to have bodily injury liability as well as property damage liability coverage.
2. Uninsured/Underinsured Motorist Coverage
This policy covers you in the event that a driver who causes an accident doesn’t have insurance or their coverage falls short. The payments can help with both medical bills and vehicle restoration. This coverage also varies by state. In Tennessee, this coverage is optional. It will cover drivers when the at-fault party has no insurance or is underinsured, paying for bodily injury damage, but not property damage.
3. Comprehensive Coverage
This policy safeguards you against a variety of negative outcomes such as robbery, vandalism, or an extreme weather event such as a hailstorm. Unlike some of the other coverages, this type of insurance is optional.
4. Collision Coverage
Collision coverage is an optional type of insurance that protects your car if you crash into another vehicle or piece of property. It also covers single-car accidents where specific criteria are involved, such as rolling. The payouts can help you repair the vehicle or even replace it if the damage is severe enough. It’s worth noting that the coverage doesn’t extend to the other vehicle or either party’s medical bills.
5. Personal Injury Protection
This form of auto insurance helps ease your medical bills in the wake of an accident no matter who was responsible. Even beyond hospital payments, it will sometimes cover lost income and other expenses that arose because of the accident, such as transportation to and from medical care. It is often required as coverage in no-fault states, where it doesn’t matter who was responsible for the accident. While some states make it mandatory, in at-fault states like Tennessee, it’s not necessary since coverage will hinge on who’s responsible for an accident.
If you’re evaluating what type of auto insurance to invest in, turn to Southern Insurance Associates in Hixson, TN. Serving the area since 1910, the insurance agent will work closely with you to identify which plan you’re most suited for. To set up an appointment, call (423) 296-0626. Learn more about the company by visiting their website.