Basic Types of Car Insurance Coverage

By | March 27, 2014

Many people buy and pay for car insurance with the assumption that if something happens to the car, the company will pay for it. But unfortunately there are plenty of scenarios that are not covered by the insurance that might have resulted in heavy repair costs. The only way to avoid this is to purchase full coverage car insurance. This insurance has different types and this article discusses the same.

Types of full coverage car insurance
Following are the basic type of full coverage car insurance:

Liability insurance coverage
Liability insurance coverage is further broken down into two types of coverage; bodily injury liability and property damage liability.

  • Bodily injury liability: This is the coverage that pays for the medical and funeral damages for the any person or people injured or killed in the event of an accident for which, you were responsible. In addition, it pays for the legal charges if the other party sues you for being associated with the accident.
  • Property damage liability coverage: This covers the damage caused by you or the other party. Instead of covering medical damages, it covers the damages caused to your as well as other people’s car. Like bodily injury liability, this insurance will also pay for the legal charges if the other party sues you for the damage.

Physical damage coverage
This coverage covers your property in the event of an accident. Physical damage coverage is divided in to two types; comprehensive coverage and collision coverage.

  • Comprehensive coverage: This coverage covers your vehicle in case of damage and loss from things other than collision like hurricane disaster, tree falling on the car, theft, etc.
  • Collision coverage: This insurance coverage is for the damage to your car when it hits other vehicle or object. This coverage is designed to pay for the repairs and in some cases replace the car.

Uninsured motorist coverage
This is divided into two classes: uninsured motorist bodily injury coverage and uninsured motorist property damage. Let us discuss each briefly.

  • Uninsured motorist bodily injury coverage: If your vehicle is struck by the driver with no insurance, this coverage pays for your damage and the other people in the car. But if the driver who struck your car has insurance, but is not sufficient to pay for the damages, this insurance will also cover these charges.
  • Uninsured motorist property damage: This insurance pays for your property if it gets damaged by an uninsured motorist. It works same as the uninsured motorist bodily injury coverage except it covers the property/car not the people.