When a car is damaged in an accident or any other natural calamity, a car insurance policy saves the money of the owner. A policy can also cover expenses due to robbery and burglary. Due to this, the owner of the car is saved from facing financial loss.
Types of Car Insurance
There are different types of car insurance policies keeping in mind the needs of different car owners. They are given below:
- Private car package policy
This car insurance policy covers damage to the owner’s own vehicle as well as expenses of third party vehicles involved in the car accident. This type of policy also covers expenses for car theft, burglary, fire or natural disasters.
- Stand-alone own-damage car insurance policy
This policy covers damages only for one’s own car. Third party vehicles are not included. Expenses incurred due to man-made disasters or natural calamities are covered by this. In order to purchase this type of policy, the car should already have active third party insurance.
- Third party car insurance
This type of policy covers expenses for third party vehicles in case of legal issues after an accident. This policy takes care of expenses if the owner’s car causes damage to another vehicle in an accident.
Need for car insurance policy in USA
Car insurance policies are required for a multitude of reasons. They are:
- Car insurance laws are set at the state level in the USA. Out of 50 states, 49 states have mandated that drivers should carry active car insurance policies. New Hampshire is the only state that is exempt from this law, but one will be required to show proof of financial responsibility if they do not have a policy.
- Car insurance is required because of responsibility for third party vehicles in case of an accident. If a vehicle is legally registered, one must have the state’s minimum liability insurance.
- Every state has different kinds of required insurance coverage. Higher level of coverage is required in no-fault states. Personal Injury Protection (PIP) as well as property damages and bodily injury coverage is required in such states.
- If a person is leasing their car, or still making payments on their car, then higher levels of insurance coverage is required. This is generally because the third party who owns the car or is providing a loan wants to protect their investment.
Types of Coverage
Different types of car insurance coverage are required in different states of the USA. Some of the most common types of coverage are:
- Bodily injury liability
This type of coverage is required in case the owner of the car injures someone else in an accident. The family members of the policyholder under the policy will also be attended to.
- Personal Injury Protection
This type of coverage is required for covering medical expenses of the owner or their family. Lost wages are also covered by this.
- Property damage liability
This type of coverage provides compensation for damages if the owner hits someone else’s car or any other structures like buildings, lamp posts, telephone poles, etc.
- Collision coverage
This type of coverage provides compensation if the owner’s car is damaged in an accident due to a third party vehicle or by potholes on the road.
- Comprehensive coverage
This type of coverage provides compensation for expenses for damages to a car by something other than collisions. This may include natural calamities or thefts.
- Uninsured motorist coverage
This type of coverage provides compensation to the owner if the third party is a hit and run case or if they do not have enough insurance to pay for the owner’s loss.
Best car insurance companies
The owner of a car has many types of insurance companies to choose from while planning to buy a car insurance policy. Some of the best car insurance companies to choose from in USA are:
Having received a perfect rating of 5/5 from Forbes, Geico is the go to choice while choosing a car insurance company. They provide cheap car insurance keeping in mind the different financial situations of different drivers. They offer great quotes to senior citizens as well as young drivers. They also sell Mexican insurance if one plans to take a trip across the border.
Nationwide provides add-on coverages to insurance policies which makes it a favourite for clients. Usage-based insurance policies and pay-per-mile options are also offered by them to drivers who want to lower their quotes if they do not drive much. They provide discounts to academically excellent students and good drivers.
They provide cheap insurance policies and are a great choice while comparison shopping. They also provide good quotes for drivers with a DUI record and offer minor violation forgiveness. They provide pay-in-full and EFT discounts.
A veteran, current military member, family of military members can opt for this car insurance company. Other people are not eligible for coverage by this insurance company. They provide discounts if one takes approved courses to improve their driving skills.
- Auto-Owners Insurance
This car insurance company provides the best discounts while purchasing if the owner pays in full. They also provide optional coverage options, which is not seen in all insurance companies. They provide green discounts for people interested in environmental conservation.
- State Farm
This car insurance company is known for providing best rates for drivers who were involved in prior car accidents and hence, face trouble while securing good policies. They provide usage based insurance policies too and provide coverage for vintage vehicles.
This car insurance company provides the best rates for advance purchase and provides many coverage options like disappearing deductibles and accident forgiveness. They provide multiple policy discounts if the policyholder has more than one policy under this company.
- Erie Insurance
This car insurance company is great for collision repair claims processes and has good coverage options like new car insurance coverage. They provide gap insurance too. They provide discounts to college students too.
Purchasing a car insurance policy from a good insurance company is the responsibility of every driver.