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Types of Car Insurance

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Five Most Common Types of Auto Insurance

There are different types of car insurance you can choose to build a policy that makes you feel safe behind the wheel. Most states require a minimum amount of liability insurance, at the very least. Depending on where you live, you may also be required to add other coverages, such as uninsured motorist or some form of medical payments.

The most common types of car insurance include:

  • Liability: Bodily injury and property damage
  • Collision: Vehicle repairs after an accident
  • Comprehensive: Vehicle repairs or replacement after a covered event
  • Uninsured/Underinsured Motorist: Injuries and damages caused by a driver with no insurance – or not enough insurance
  • Personal Injury Protection (PIP) or Medical Payments (MedPay): For medical costs related to an accident

Besides these basics, you can choose other kinds depending on your needs. At Acceptance, our friendly agents walk you through all the options and help you build a customized and flexible plan. Here is how each of these coverages work, as well as additional specialty types you can add:

What is Liability Insurance?

Liability insurance protects you from claims that may result when another party is injured, or their property is damaged after a car accident. After a wreck, law enforcement, insurance companies and courts decide who caused the crash or how much responsibility each party shares. It’s not always cut and dried. Sometimes more than one person may share a percentage of the fault. When all is said and done, your liability insurance kicks in to help pay for your portion of the responsibility.

Most states require a minimum amount of liability, but in many cases, it is not enough to properly protect you if, for example, you hydroplane on a rainy day and smash into someone else’s car. This is why drivers who want peace of mind often increase the required minimum amount.

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Bodily Harm and Property Damage Liability Insurance

Almost every state requires some form of liability insurance for its drivers. These policies are designed to help pay for the property damages and injuries (or death) of people involved in a car accident. It depends on where you live what your minimum requirement is and whether that coverage will include some other required types of insurance (such as uninsured motorist).

Bodily injury liability helps pay for medical costs associated with an accident. This may include ambulances, emergency room costs, doctors, follow-up visits, therapy and lost wages, and even funeral expenses if someone is killed in the accident.

Property damage liability is intended to help pay for the cost of repairing property damaged in a covered event. This may be vehicle damage or damage to other property, such as a fence.

The minimum amount of liability required in most states is low when compared to the costs of medical care and repair shops. This is one reason many drivers choose to increase their limits.

Collision Coverage

Collision is intended to help pay for damages to your vehicle after an accident, regardless of who is at fault. Collision coverage applies to any covered wreck, including single vehicle and multi-vehicle. For example, if you drive your vehicle into a telephone pole and cause extensive damage, your collision coverage will help you pay for repairs.

Collision is typically bought along with comprehensive, but you may purchase it separately if you do not want comprehensive coverage. Collision also comes with a deductible you must pay.

Comprehensive Coverage

Comprehensive coverage is for things that are out of your control and mostly happen when you are not even behind the wheel. For example, if your car is stolen or a tree falls on your truck during a major storm. Comprehensive and collision when added together and purchased with liability make up full coverage.

As with collision, comprehensive can be purchased separately and it comes with a deductible.

Car insurance FAQs

Get answers to common insurance questions

SR-22 Insurance

SR-22 insurance goes by a variety of names, including DUI insurance, but it’s just a certificate you’ll need to file with your state’s DMV if ordered by a court of law. In most cases, an SR-22 does result after a DUI conviction, but it can also happen if you are convicted of driving without insurance and other offenses. Because this requirement is associated with what insurers consider risky driving behavior, being required to carry an SR-22 normally means higher rates than before. It’s important to shop around and look for an agency that has experience insuring drivers with an SR-22.

Our welcoming Acceptance agents want to help you get back on the road with insurance you can afford.

Medical Payments (MedPay) and Personal Injury Protection (PIP)

Depending on where you live, your state may require you to carry either MedPay or PIP. These are medical cost coverages to help you pay for the expenses associated with an accident. These are like health insurance, but also help pay for items health insurance doesn’t cover. Although similar, MedPay and PIP do work slightly differently. Here is a chart explaining the differences.

Scroll for more
Coverage MedPay PIP
Doctor Visits Yes Yes
Medical Treatment Yes Yes
Funeral Expenses Yes Yes
Deductibles/Co-Pays Yes No
Extended Nursing/Rehab Yes Yes
Ambulance/EMT Yes Yes
Prosthetics Yes Yes

What Does “Full Coverage” Mean?

Full coverage is a term that usually means a combination of liability coverage, collision and comprehensive. In most cases, when you finance a vehicle, your lender will require full coverage to protect the value of the car or truck until you pay it off.

Although it sounds like it should cover every eventuality, full coverage is more than your state requires but it won’t cover everything. It will help you recoup your losses after a covered event, such as an accident or vehicle theft. The comprehensive and collision parts of full coverage are available to you regardless of who caused the wreck or damaged or stole your vehicle.

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Uninsured Motorist Insurance Coverage

Uninsured motorist (UM) coverage is required in some states. Other states require insurers to offer it, but policyholders may decline it. Given how many drivers there are with no insurance (1 in 8 nationwide, according to some recent sources), this coverage is well worth its cost. In Tennessee, it is estimated roughly 23 percent of drivers have no insurance.

UM kicks in if you are in an accident caused by a driver with no insurance. It will help pay your repairs and medical costs. It also helps if you are involved in a hit-and-run accident. For the cost, this coverage is well worth it.

Underinsured Motorist Insurance Coverage

As uninsured motorist coverage, underinsured motorist coverage (UIM) helps pay for your damages and injuries if you are in a crash with an underinsured driver. Many states have very low minimum requirements that won’t go far if your vehicle is heavily damaged by someone hydroplaning on a wet day.

For example, Tennessee requires $25,000 in property damage liability. If your vehicle is totaled by someone, this may not be enough to fully cover your damages. Adding UIM can help make up the difference.

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Specialized Insurance Options for Unique Circumstances

At Acceptance, one of our strengths is listening to our customers and helping them build flexible and customized polices that match their unique needs. Here are additionally special situations that fall outside of the most common types of protection:

  • Roadside Assistance: Roadside assistance is your 24-hour emergency help partner that responds when you need it the most. Professional technicians will come to your location with gas, tools to change your tire or jump your battery, the ability to open a locked door, and much more.
  • Rental Reimbursement: When your vehicle is in the shop for a covered repair, you’ll still have transportation in the form of a rental car.
  • New Car Replacement: If your new car is a total loss, this will provide the funds necessary to replace it with a similar make and model.
  • Non-owner: If you do not have a car but you rent or borrow often, you can purchase this to ensure you are always protected.
  • Classic Car: Specifically designed to protect those antique or vintage vehicles.

Guaranteed Auto Protection

Gap insurance is specifically designed for those who are financing a new car. Your car begins to depreciate the minute you drive it off the lot. In many cases, if your vehicle is stolen or declared a total loss due to damage, you’ll owe more than the market value. This coverage helps bridge that “gap” by paying off your loan.

Get a Customized Auto Insurance Quote Today

As you can see, there are many types of car insurance ranging from plain liability to robust packages providing more protection. Our agents have many years of experience helping drivers just like you find the policy that is flexible and meets your unique needs.

Check us out online for a fast and free car insurance quote, give us a call at 800-321-0899 or stop by one of our neighborhood locations for a friendly chat.