Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Oct 4, 2020

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Key takeaways...

  • Four factors determine the number of insurance coverages available to a consumer
  • Ultimately, there are five possible, main coverage options you may want to consider for auto insurance
  • Liability insurance is required no matter what, but depending on your circumstances, you may want more coverage
  • If you take the time to research and understand all the coverage options, you can better decide what is best for you

Before purchasing auto insurance, there are a number of facts that the consumer need to consider. Each state has unique insurance laws and minimum requirements.

Consumers need to have detailed information before making a final decision on which and how many types of auto insurance coverages are preferable.

If you’d prefer a better and more affordable auto insurance policy, enter your ZIP code above and compare at least three to four policies today!

Table of Contents

The Basics

Most states require all motor vehicle owners to have liability insurance, which takes care of expenses to repair damages.

In the event of the policyholder damaging another person’s car, it is advisable for the policyholder to purchase several relevant auto insurance coverages,”to avoid taking numerous risks.” How many types of auto insurance coverages are there?

 The number of insurance coverages depends on various factors as highlighted below:

  • State Government’s Requirements  All the states have rules that govern auto insurance operations, laws that ensure the public interests are protected at all times. The insurance rules enforce ethical insurance practices.
  • Cost Implications  Purchasing multiple insurance policies have some serious financial concerns that must be analyzed effectively
  • Risks A Consumer Is Exposed To On A Daily Basis  Insurance needs might vary from one individual to the other
  • Utility Tasks (Tasks The Car Undertakes)  A commercial vehicle will require different insurance cover policies in comparison to a family car

Here are some of the types of car insurance:

Liability

https://www.youtube.com/watch?v=qq4gjxq0v8o

Liability insurance is essential even at a minimum amount. Liability insurance has two principal components that are bodily injury and property damage.

Though the insurance is a set minimum amount, the policyholder can adjust the amount to avoid being liable in case the cost of property damage exceeds the amount covered.

Comprehensive

Comprehensive insurance covers the policy holder’s car. It covers damages that do not have any relation to road traffic accidents.

These damages include:

  • Natural calamities (such as floods, hail storms, ice storms, hurricanes, and tornadoes)
  • Fire Outbreak
  • Car Theft
  • Car Vandalism

The car insurance deductible was designed to discourage car insurance fraud. The higher the deductible, the lower car insurance premiums will be. The deductible amount must be paid before compensation takes place.

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Collision

This type of coverage insures the policyholder’s car in the event of an accident. It caters for collision or the vehicle hitting another object such as a road sign post.

Personal Injury Protection (PIP)

Often referred to as PIP insurance, personal injury protection is mandatory in various states within the U.S. These states are commonly acknowledged as no-fault states.

This insurance covers policyholder injuries.

Uninsured Motorist Insurance

In the event of an accident, uninsured motorist insurance covers a policyholder against the at-fault driver who does not have insurance coverage.

This process helps the consumer save time — especially time spent in courts seeking for compensation. The insurance company takes the burden of legal hurdles. Uninsured motorist insurance is partially mandatory in some of the states.

The previous analysis of various policies provides a convincing reason for the policyholder to acquire multiple auto insurance coverages.

There are many reasons to purchase several types of car insurance.

Below are a few reasons to keep in mind:

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Insurance Coverage Pattern

The coverage pattern is the initial point of auto insurance policy cover. The coverage pattern varies from one company to the other; it is guided by the state insurance laws, insurance rates, and payable insurance premiums.

The policyholder needs to decide on the best policy coverage pattern.

Identifying a Steadfast Insurance Firm

Choosing an insurance service provider based on financial capacity or previous history might not serve the purpose. The car owner needs to conduct an in-depth analysis.

A complete understanding of different car insurances coverages will assist the policyholder to identify and purchase the best auto insurance.

The process ensures the policyholder is safe from legal responsibilities that come with various liabilities. It also ensures the policyholder gets the best deal for insurance fees.

Most of the insurance companies offer a substantial discount on multiple policy purchases. Finally, there are many options the motorist can opt for. Getting the right policy is a fulfilling experience.

However, in some cases, the car owner may find some of the coverages irrelevant.

If you find yours irrelevant and want new auto insurance, enter your ZIP code below and start comparison shopping today!

References:

  1. https://wallethub.com/edu/types-of-car-insurance/9636/
  2. https://www.progressivecommercial.com/coverages/liability/
  3. https://www.geico.com/information/aboutinsurance/auto/
  4. https://wallethub.com/edu/uninsured-motorist-coverage/9647/
  5. https://www.nationwide.com/how-much-is-car-insurance.jsp