In order to get all the protection that you want and need, it’s vital for you to understand the different types of auto insurance available today, and what each of the different types offers you regarding protection. Once you understand the differences between gap, liability, collision or SR-22, you’ll have an easier time deciding on the right insurance for you.
If you have collision coverage and get into a very serious accident, your insurance company will only pay you the current value of your vehicle. In many instances, either the value will be less than the balance remaining on your auto loan, or it isn’t going to be enough to obtain another vehicle of similar quality. Closing that difference is the purpose of gap insurance.
Liability insurance is the coverage that drivers in nearly every state are required to have. It covers any damages they might cause in a collision with another driver. It’s important to note that liability will only cover costs and damages for the other driver, not any that you may sustain. Liability is not the only type of insurance to have if you want coverage on any of your belongings or for your medical expenses.
This type of insurance is designed to protect your vehicle when you are involved in an accident that is your fault. This type of insurance is often mandatory when you are financing a car, and it will cover the costs of your loan if you get into a serious accident.
It is estimated that as many as 1 out of 7 drivers carry no auto insurance. To help protect everyone involved in accidents, it is now mandatory in many states for drivers to carry uninsured motorist insurance. This coverage helps make up some of the costs incurred from accidents involving persons without auto insurance. With this type of policy, you and your passengers will get help with lost wages, medical bills and other costs associated with the accident.
An SR-22 isn’t actually insurance at all but with it, you certifying that you have auto insurance that meets state minimums. Anyone that commits serious violations such as a DUI or accrues a high number of moving violation points will be responsible for getting an SR-22 so that the DMV knows for sure insurance properly covers them.
Medical Payments Coverage
Medical payments coverage is a type of insurance that you can add to your policy to make sure that your medical costs are covered after an accident. It will pay for things like funeral expenses, the medical bills of you and all your passengers, and even injuries that you suffer while on a bicycle or as a pedestrian.
Now that you know more about the main types of auto insurance, you can use your knowledge to help you find the plan that is best suited for your needs.