Car accidents are an unfortunate reality for many people. Because driving comes with a lot of responsibility, it’s important to make sure that you are prepared when and if disaster strikes. The truth is, car accidents can be a financial burden, especially if the involved vehicles are badly compromised, or someone gets seriously injured as a result. Car insurance is what protects you from an accident wreaking havoc on your finances. Read on to learn more about the many ways that car insurance can protect you and others on the road.

What Car Insurance Covers

A car insurance policy is made of different coverages for various circumstances. Certain types of insurance are required in many states, and other types of insurance are optional. These are the most common types of car insurance coverage:

  • Property damage liability coverage: If you are the at-fault driver in an accident and cause damage to someone else’s property, property damage liability coverage will pay for the damages.
  • Bodily injury liability coverage: This type of coverage will pay for any injuries you may have caused to another party in an accident that was your fault. Bodily injury liability coverage is required in nearly every state, except for New Hampshire. In New Hampshire, drivers are strongly encouraged to add it to their policy, but it is not mandated.
  • Collision coverage: If you are ever in a car accident and your vehicle is compromised, this type of coverage will help pay for your car repairs. This type of coverage is optional in all states.
  • Comprehensive coverage: In some cases, car damage is caused by something other than a car accident. If your car ever becomes compromised due to bad weather, vandalism, or theft, comprehensive coverage will pick up the bill for your repairs.
  • Medical payments/personal injury protection (PIP): This type of coverage is required in certain states and is made to cover your medical bills associated with an accident if you or one of your passengers gets hurt.
  • Uninsured or underinsured motorist coverage: This type of coverage protects you if you are ever in an accident that isn’t your fault, but the driver who caused it is not properly insured. Some states do require this type of coverage, since unfortunately, it’s pretty common to come in contact with an uninsured driver on the roads.

Other Types Of Insurance

Now days, insurance companies have come up with a plethora of coverages to make sure that their customers are taken care of in all types of situations. Here are a few of the more specialized types of insurance:

  • Gap insurance: Drivers who are leasing their car or who have an outstanding balance on a car that they have financed should consider getting this type of insurance on their policy. If your car ever gets deemed a “total loss” following an accident, gap coverage will make up the difference between what your car insurance company pays you and what the remaining balance is on the lease or loan.
  • Antique or classic automobile insurance: This type of insurance is worth looking into if you have a classic car and want to make sure it’s covered if it ever gets damaged.
  • Rideshare insurance: This type of coverage is ideal for drivers who work for rideshare companies like Uber and Lyft. 
  • Commercial car insurance: Drivers who use their car for work purposes may need to get this type of insurance rather than, or in addition to, a personal plan to keep them safe.

Typically, car insurance will cover the policyholder along with any other household members that are listed as drivers on the policy. Most insurance policies will also cover anyone who is driving your car with your consent.

The Cost Of Car Insurance

There are a lot of different factors that car insurance companies will take into consideration when setting a price for your coverage. A lot of times these factors will include your age, driving history, location and what kind of car you have. Here are the two types of payments you will have to consider when dealing with car insurance:

  • Car insurance premium: This is the amount of money that you will pay to your insurer simply for covering you. Usually, you can choose to pay this monthly or in full.
  • Car insurance deductible: This is the amount of out-of-pocket expense that you will sometimes need to pay in order for your insurance company to cover your claim. Let’s say for example, that you have a $300 deductible, but you get into an accident and the total cost to repair it is $1,300. You would pay $300 and your insurance company would pay $1,000. Typically, your deductible is something that you discuss with your insurance company when you sign up for your plan, as there are many different options to choose from. No two policyholders need to have the same deductible.

Note that the higher your deductible, the more you will have to dig out of your own wallet to pay for the expenses. However, the higher your deductible is, the lower your overall costs will be and vice versa.

How To File An Insurance Claim

Regardless of if your car was damaged as the result of a car accident or a different cause, it’s important to let your insurance company know right away. Your claim will be assigned to a claim adjuster within your insurance company. Their job is to take a look at the damage and figure out how much the company needs to pay you as part of your policy agreement.

Then, you will need to determine what information your insurance company needs to process the claim. There’s a good chance that you will need:

  • To submit photos of your damaged car.
  • Documentation: This could include police reports, and receipts if there was anything you had to pay for out-of-pocket.
  • The name of the other driver who was involved, if applicable, as well as their insurance information.

Your insurance company might have a list of repair shops that they have connections with, but you are usually able to choose your own if you want to. After the car is fixed, your insurance company will either pay the repair shop directly or they will reimburse you if you already made an out-of-pocket payment.

Car insurance is a necessity, but it isn’t a one-size-fits all amenity. Get quotes and shop around before choosing the insurance company that is right for you.

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