Understanding the Different Types of Auto Insurance Coverage

Auto insurance offers crucial financial protection for drivers, helping keep you from paying out of pocket for unexpected losses. A key aspect of auto insurance involves selecting the best types of coverage for your situation.

What Are the Different Types of Auto Insurance Coverage?

Auto insurance policies are often customized to address the policyholders’ needs. Before selecting coverage types, you should consider your vehicle type, budget, risk profile and the level of financial assistance you prefer. Most standard policies include the following core coverages:

• Liability coverage may pay for third-party injuries and property damage if you’re at fault in an accident.

• Collision coverage may reimburse your vehicle’s repair or replacement costs after an accident.

• Comprehensive coverage may provide financial aid if your car suffers damage from falling objects or noncollision incidents like theft and vandalism.

• Uninsured/underinsured motorist coverage may cover your expenses if you’re in an accident with an at-fault driver who lacks coverage.

• Personal injury protection may pay for lost wages, hospital bills and funeral expenses after an accident, regardless of fault.

For greater financial security, consider the following optional coverages:

• Medical payments coverage may cover medical expenses for you and your passengers, regardless of fault.

• Gap insurance may cover the difference between your car’s actual cash value and what you still owe on your auto loan, if your vehicle is totaled.

• Rental reimbursement coverage may pay for a rental car while your vehicle is being repaired due to a covered incident.

• Roadside assistance coverage may provide services such as towing, battery jump-starts, tire changes and lockout assistance.

• New car replacement coverage may pay for a brand-new replacement vehicle if your car is totaled within a specified time frame.

• Custom parts and equipment coverage may cover aftermarket modifications like custom wheels, sound systems or performance upgrades.

Selecting the right combination of coverages can help safeguard you against various risks. Global Insurance Agency can help assess your insurance needs and find the policy that offers the best value. Contact us today to learn more.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.