What are the types of Car Insurance Coverage?

When getting an insurance quote, it’s worth looking at how much it costs to insure your car for each level of cover before you buy.

It’s good to save money, but it’s also good to strike a balance between how much you pay and how much protection you get. Don’t compromise on cover just to save a few quid.

1. Liability Insurance

Liability insurance covers you in the event you are in a covered car accident and it is determined the accident is a result of your actions. Liability insurance will cover the cost of repairing any property damaged by an accident as well as the medical bills from resulting injuries. Most states have a minimum requirement for the amount of liability insurance coverage that drivers must have. If you can afford it, however, it is usually a good idea to have liability insurance that is above your state’s minimum liability coverage requirement, as it will provide extra protection in the event you are found at fault for an accident, as you are responsible for any claims that exceed your coverage’s upper limit. You wouldn’t want to run the risk of having to pay a large amount of money because your policy limit has been exceeded.

2. Collision Coverage

If there is a covered accident, collision coverage will pay for the repairs to your car. If your car is totaled (where the cost to repair it exceeds the value of the vehicle) in an accident, collision coverage will pay the value of your car. .

If your car is older, it may not be worth carrying collision coverage on it, depending on the value. On the other hand, if you have a more expensive car or one that is relatively new, collision insurance can help get you back to where you were before any damage to your car. Note: If you have a lienholder, this coverage is required.

3. Comprehensive Coverage

What if something happens to your car that is unrelated to a covered accident – weather damage, you hit a deer, your car is stolen – will your insurance company cover the loss? Liability insurance and collision coverage cover accidents, but not these situations. These situations are covered by Comprehensive (other than Collision) coverage.

Comprehensive coverage is one of those things that is great to have if it fits in your budget. Anti-theft and tracking devices on cars can make this coverage slightly more affordable, but carrying this type of insurance can be costly, and may not be necessary, especially if your car is easily replaceable. Note: If you have a lienholder, this coverage is required.

4. Personal Injury Protection

While Comprehensive coverage may be something you don’t need to purchase, Personal Injury Protection (PIP) is something you should. The costs associated from an accident can quickly add up, and in order to cover those costs Personal Injury Protection is available. With this coverage, your medical bills along with those of your passengers will be paid, no matter who is at fault for an accident. Note: This coverage is not available in all states.

5. Uninsured /Underinsured Motorist Protection

While state laws mandate that all drivers should be insured, this is unfortunately not always the case. Another issue that can arise is that while a driver may have liability insurance, many states have relatively low minimum coverage requirements that may not be enough to cover all of the expenses of an accident. So, if someone is legally responsible for damages related to an accident, you won’t receive any payment if they do not have coverage or you will receive less than you need to cover the cost of damages if your damages exceed their coverage amount. This is the type of situation where Uninsured and Underinsured Motorist Protection would help with expenses.

When Auto Insurance is Not Covered

There are situations in which auto insurance does not take care of a claim even if it is in your coverage.
Casualties, carelessness and some fortuitous circumstances are the most common causes.

When it comes time to protect a car, coverage is determined by the type of insurance chosen: third parties, all risks… However, there are claims that the policy will probably not cover.

Whether due to negligence, carelessness or mere misfortune, there are a number of circumstances in which insurance companies may refuse to pay compensation after a loss. These are the most outstanding:

Fortuitous circumstances
Sometimes there is a succession of coincidences that, unfortunately, will make the insurance companies not take charge in the event of a claim. These are inevitable coincidences, which together cause some of the most common circumstances in which the client is discovered.

In the event of an accident against a family member, the insurer may refuse to cover the costs.

Accident against a family member
In the event of an accident against a relative (up to third degree of consanguinity), the insurer may refuse to cover the costs. There is generally a tendency to think of it as a possible fraud and therefore the party responsible for the accident will have to bear all costs arising from the incident.

Children under 25 not included in the policy
If the person responsible for an accident is a minor under 25 years of age or a driver who is less than 5 years old, and in neither case is included as an occasional driver, the policyholder would have to pay for the damage caused to third parties. For these cases there are special policies for new drivers with which they are covered in the event of an accident.

Natural disasters and terrorism
In the event of damage caused by meteorological problems, military operations (in peacetime) or terrorist acts, even if the insurance companies do not bear the costs, the Insurance Compensation Consortium will do so.

Although this is a very unknown figure, the Consortium of Insurance Compensation is a public body at the service of the Spanish insurance sector and is fully integrated in it. It is responsible for compensating those cases that are not covered by the market, such as those mentioned above, that is, damages caused by violent acts such as terrorism or by actions of the Armed Forces without being in time of war, among others.

Neglect
A mere misunderstanding can have more serious consequences than it may initially appear. Carelessness with the dates of the ITV or a simple forgetfulness can cause insurers to disregard the corresponding compensation.

Theft of the vehicle with keys on it
Leaving the car with the keys on or with any active system inside that allows the vehicle to open or operate the interior and that it is stolen, will not be covered by the insurance. In these cases it becomes theft rather than theft, since it has been triggered by gross negligence on the part of the driver.

Theft of personal property
Usually, most insurance companies do not pay for the theft of items inside a car, such as keys, sunglasses, laptop or mobile phone, unless these are previously declared in the policy as extra accessories.

Driving without ITV or license
Not having up-to-date Technical Inspection of Vehicles (ITV) and being the cause of an accident, will not only make the insurer not be financially responsible for the expenses arising from the event, but also expose the driver to the corresponding financial penalty.

Unapproved tuned vehicle
Tuning can cause problems at the time of an accident. Having a tuned car insurance does not guarantee that all items that have been added will be covered by the insurance company. Only those which have been approved and whose modification has previously been communicated to the insurance company will be approved.

Roadside assistance on roads unfit for traffic
Riding on unpaved dirt roads carries the risk that, in the event of a need for roadside assistance, insurers are not obliged to provide it. There are Auto insurance policies with conditions specially designed for off-road vehicles that can travel on rural roads and want to be covered.

Casualties
Some accidents are due to carelessness on the part of the driver. In these cases, not only will the insurance companies not cover the costs incurred, but also the driver will have to face a fine.

Impudence at the wheel can have very serious consequences, in addition to appropriate sanctions

Driving under the influence of alcohol or drugs
Being under the influence of alcohol or drugs is another reason why insurers will not be liable for the costs of damage to third parties. In addition to this, the driver will have to deal with the corresponding penalties for this type of situation caused by the consumption of certain substances at the wheel.

Participation in illegal racing
Participating in illegal races inside or outside a circuit will also make the insurance company bear no costs if necessary. It will be the driver of the vehicle himself who will have to take care of both the damages caused to third parties.

Omission of the duty of relief
Another reason why the insured person will not receive financial aid is the failure to help the other victims involved in the accident. In such cases, it will also have to face the corresponding legal sanction, since it is a criminal offence.

Carrying more passengers or more cargo than permitted
Carrying more passengers in the car than permitted or more cargo is not only a crime and the driver will have to pay the corresponding fine, but also in the event of an accident the insurance company will not pay the costs to third parties.