Types of Car Insurance Coverage in the US
Motor Insurance coverage in America varies from state to state but generally the following offers an overview of the general coverage all over the US.
· Liability Coverage This type of car insurance covers the policy holder for any bodily injury (BI) or physical damage (PD) which he is considered responsible.
The amount of coverage varies from state to state in fixed amount.
However, the policy holder has the option to increase the scope of coverage for an additional cost but prior to any accident.
· Combined Single Limit The combined single unit joins coverage for property damage and bodily injury coverage under one single combined limit.
For example a driver with this type of coverage hits another vehicle on the road.
Damages on the other driver's vehicle shall be covered by this type of car insurance, plus the damages claimed by the driver and his passenger.
· Full Coverage Full Coverage is the combination of liability, comprehensive and collision coverage.
This is supposed to embrace all three policies under one wing.
· Collision From its name, this auto insurance provides coverage to vehicles involved in collisions.
Policy under this type handles cost of repairs to the other vehicle involved in the accident or cash equivalent for those vehicles considered beyond repair or total wreck.
· Comprehensive This policy provides all if not most of the standard policies plus other incidents not covered by collisions such as: weather, fire, theft or attempted theft and impacts on animals.
· Uninsured/Underinsured Motorist Coverage This is also called in the industry as UM/UIM.
This provides coverage if the "at fault" party does not have insurance or his policy is not enough to cover damages incurred.
In cases like this, the insurance company handles all medical bills and in turn bills the at-fault party.
· Loss of Use This is also called rental coverage.
This policy provides reimbursements to repairs done on a covered rented vehicle.
· Loan/Lease Payoff This type of policy provides protection to policy holders against the gap between the depreciated value of the car and the amount he owes the bank.
This is how this insurance got its other name GAP coverage or GAP insurance.
Because of the rapid depreciation rate of a care after purchase, its appraised value say after six months will be much lower than the original amount the owner loaned from the bank to by the car.
Trouble starts when the car will be declared "total wreck" after an accident.
Hence when the standard insurance coverage pays the owner, he still owes the bank the "gap" between the amount loaned and the amount paid by the insurance company.
This policy can pay most of the amount involved.
· Towing Towing coverage covers costs for services like towing due to flat tire or mechanical breakdown and other non-accident related road issues.
· Liability Coverage This type of car insurance covers the policy holder for any bodily injury (BI) or physical damage (PD) which he is considered responsible.
The amount of coverage varies from state to state in fixed amount.
However, the policy holder has the option to increase the scope of coverage for an additional cost but prior to any accident.
· Combined Single Limit The combined single unit joins coverage for property damage and bodily injury coverage under one single combined limit.
For example a driver with this type of coverage hits another vehicle on the road.
Damages on the other driver's vehicle shall be covered by this type of car insurance, plus the damages claimed by the driver and his passenger.
· Full Coverage Full Coverage is the combination of liability, comprehensive and collision coverage.
This is supposed to embrace all three policies under one wing.
· Collision From its name, this auto insurance provides coverage to vehicles involved in collisions.
Policy under this type handles cost of repairs to the other vehicle involved in the accident or cash equivalent for those vehicles considered beyond repair or total wreck.
· Comprehensive This policy provides all if not most of the standard policies plus other incidents not covered by collisions such as: weather, fire, theft or attempted theft and impacts on animals.
· Uninsured/Underinsured Motorist Coverage This is also called in the industry as UM/UIM.
This provides coverage if the "at fault" party does not have insurance or his policy is not enough to cover damages incurred.
In cases like this, the insurance company handles all medical bills and in turn bills the at-fault party.
· Loss of Use This is also called rental coverage.
This policy provides reimbursements to repairs done on a covered rented vehicle.
· Loan/Lease Payoff This type of policy provides protection to policy holders against the gap between the depreciated value of the car and the amount he owes the bank.
This is how this insurance got its other name GAP coverage or GAP insurance.
Because of the rapid depreciation rate of a care after purchase, its appraised value say after six months will be much lower than the original amount the owner loaned from the bank to by the car.
Trouble starts when the car will be declared "total wreck" after an accident.
Hence when the standard insurance coverage pays the owner, he still owes the bank the "gap" between the amount loaned and the amount paid by the insurance company.
This policy can pay most of the amount involved.
· Towing Towing coverage covers costs for services like towing due to flat tire or mechanical breakdown and other non-accident related road issues.
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