Car insurance is not only a major industry in the United States, but it is also a necessity and a safeguard for drivers. Liability insurance is required by all states, because it covers damages to others' cars, properties, and persons, but comprehensive and collision insurance are optional. Following are descriptions and benefits of the different types of auto insurance coverages, as defined by Insure.com.
Different Types of Auto Insurance: Liability Insurance
This type of car insurance coverage is mandatory. Liability insurance covers the other party in accidents. When a driver causes an accident, damages to others' cars, persons (injuries), or properties (fences, yards, houses) are paid for by the at-fault driver's liability coverage. This is a mandatory type of auto insurance because all states feel that no one should have to cover their own properties when another damaged them, so the at-fault driver covers damages and injuries sustained by others.
Comprehensive Auto Insurance
Of the different types of auto insurance, this optional coverage pays for repairs to one's car after damages sustained by environmental phenomena. Deer running into the road, hail, floods, falling trees, and other such phenomena can cause damages to a car, which are then covered by comprehensive car insurance. When another car causes damage to one's car, comprehensive coverage is not used, but that other driver's liability auto insurance pays for damages sustained.
Collision Auto Insurance
This type of insurance coverage pays for damages to one's car sustained when the driver causes an accident. Liability coverage pays for any damages that may be caused to other parties, while collision coverage pays for damages to the at-fault driver's car. This is one of the types of auto insurance that is optional. When accidents occur with frequency, and collision coverage is required often to repair a driver's vehicle, that driver's collision insurance premiums will rise.
Uninsured Motorist and Underinsured Motorist Auto Insurance Coverage
This is one of the different types of auto insurance that covers a driver when someone else causes an accident that produces damage or injuries, but the at-fault driver lacks liability or enough liability coverage to pay for damages. Required in some states, uninsured and underinsured motorist insurance looks after a policy holder's car and person following an accident that was not caused by the owner, when the at-fault party cannot pay for, or cannot pay for all, of the repairs.
All of these optional and mandatory car insurance coverages have certain benefits. however, depending on certain individual situations regarding drivers or vehicles, some of the optional coverages may not be necessary.
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