Types of Car Insurance Coverage

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In the insurance world the coverage represents the amount of risk or liability that an insurance agency covers for a policy holder through their services. The coverage is issued in the event of an accident. Although insurance is mandatory all over the United States and in most parts of the world, as a policy holder you are not covered in all possible scenarios. The minimum mandatory coverage only takes care of certain situation. There are different types of car insurance coverage that you can choose from. When calculating the coverages, the insurance agencies will take into account the probability of the accident actually happening. Therefore certain categories of people will be charged more for the same coverage. For example policy holders under 25 or over 55 years old are more likely to cause accidents and so are people who own sports cars or drive a lot of miles.

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Basic coverage
The most important car insurance coverage is the auto liability coverage. This is used in order to cover the damages of an accident caused by the policy holder. There are two categories of auto liability coverage: bodily injury liability and property damage liability. The first category covers medical expenses as well as pain and suffering claims, lost wages or other possible bodily damages. The second category covers damaged property and it usually refers but it is not limited to the repair costs of the other driver’s car. In this type of car insurance coverage, one can also include legal costs in case of a law suit. There is a minimum amount of coverage dictated by the law of each state but one can purchase more coverage if necessary.

Additional Coverages
Personal injury protection is one of the most important types of car insurance coverage. It is used in order to pay for necessary medical expenses for treatment due to a car crash. It is important to understand that not all the people in your car are covered by this clause but only the ones that are named in your policy. This coverage can also pay for rehabilitation, funeral expenses, lost wages or replacement of services. A similar coverage is medical payments which pays for the reasonable and necessary medical and funeral expenses caused by a car crash for the people named in the policy. People who own new and expensive cars should always purchase the collision coverage which pays for collision with another vehicle or an object. It also covers for a vehicle rollover. In case you want to be covered for other unexpected events such as fire, wind, hail, flood, animal accidents, theft of vandalism you will need a comprehensive coverage. Other coverages that you can choose are uninsured motorist, rental reimbursement, under insured motorist or emergency road service.