- Posted 11 Mar
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Figuring out the many types of car insurance can be rather confusing. There are a range of products, and its important to have an understanding of what they cover and how they work so that you don’t end up overspending, or worse, underspending and being undercovered.
1. Bodily Injury and Liability
With this types of insurance, you will be well protected against any clams that are made against you if you caused any bodily injury to another party in a car accident. It will also cover the cost of your legal fees, should there be a lawsuit.
This is a very important type of insurance to purchase, as it will safeguard you in the event that anybody was hurt in the accident you were involved in. This is the best option if you’re vehicle is used for business purposes.
2. Collision Insurance
With this type of insurance, you are covered in case claims are made against you regarding collision with other cars or stationary objects, such as signs along the road, buildings, or other external objects.
Now with this type of insurance, if the damages were caused by you, you may not be able to claim for damages on your own car. This can depend on whether it is “first” or “third” party insurance. Typically, your insurance will pay when the other driver crashes into you.
Collision insurance can be expensive, as it covers property damages as well. The coverage is based on the percentage to which the car has been damaged.
As with most policies, you will pay a deductible. Always read the fine print before you purchase this type of policy.
3. Comprehensive Coverage
With comprehensive insurance, your car will be covered for a wide range of events. This type of cover is for vandalism, theft and acts of god. If you hit a kangaroo while driving through the countryside, this type of insurance will kick in.
With comprehensive, you will need to pay a relatively high excess. The insurance company will cover the rest once this deductible has ben met.
4. Medical Payments or Personal Injury Protection
This is rather similar to bodily injury/liability. The difference is that in this case, the policyholder and the passengers are protected in the case of an accident. This insurance will cover medical bills, loss of earnings and death. While not necessarily car insurance, this is something you should consider if you travel long distance a lot.
As we have seen, there are a variety of insurance options that you can purchase. Make sure to take the time to learn as much as you can about the insurance products that might be available to you before you buy.
Need help figuring out what’s right for your car and situation? Contact our team today to discuss your needs.