In America, the average driver will experience four vehicle accidents in their life. While this may not seem like a large number, driving without car insurance leaves you financially responsible for any damages.

But, how do you know which types of car insurance policies you need to be protected? 

Fear not, we discuss this and more in this article. Read on to learn about some of the most common types of car insurance policies and how to choose which is right for you.

Personal Injury Protection

Insuring your car with personal injury protection helps with lost income and medical expenses relating to a collision. It protects the policyholder, other drivers, and any passengers regardless of fault.

Liability Insurance

Liability insurance protects the other driver(s), passengers, and pedestrians when the accident is the policyholder’s fault. It covers expenses associated with the accident including property damage and medical bills. 

However, it’s important to understand that these car insurance benefits do not apply to the policyholder or their passengers.

Collision Insurance

Collision insurance covers the cost of damage to the insured vehicle after an accident. It does not cover property damage or medical expenses. These car insurance policies are often required for leased or financed vehicles.

Uninsured/Underinsured Motorist Insurance

If another driver causes an accident but doesn’t have insurance, uninsured/underinsured motorist coverage is a budget saver. This applies to hit-and-runs and gaps in the other driver’s coverage.

Comprehensive Insurance

Comprehensive insurance protects you from damage expenses resulting from factors other than a car accident. Some examples are listed below.

  • Broken windows from theft
  • Vandalism
  • Hail damage
  • Flood damage
  • Fire damage

Comprehensive coverage doesn’t apply to medical expenses, property damage, or personal belongings stolen from your vehicle.  

Deciding Between the Types of Car Insurance Policies

Since there are so many types of car insurance policies, it’s difficult to decide what you need. The right coverage depends on factors such as where you live, what kind of car you drive, and how much risk there is of an accident.

Learn Your State Laws

Each state has different laws regarding car insurance policies. This is why it’s important to check local laws before deciding which type of car insurance you need. 

For example, all states require liability insurance but not all require uninsured/underinsured motorist coverage. Providers such as can tell you what your state requires.

Consider Value

The value of your car or the state of your finances is another important factor to consider. If you’re leasing a car or have a loan, you may be required to get collision insurance by the lender. 

If you can’t afford to fix certain damages, obtaining the right car insurance policies can protect you. If your situation changes, you can always discuss policy adjustments with your provider.

Consider Risk

A person who rarely drives may not need the same level of coverage as a person who drives all day every day. The amount of risk you have of getting in an accident should be factored into your insurance decisions as well.

Protect Yourself and Others

The different types of car insurance policies are designed to protect you and others from the financial impact of a car accident. Consider your local laws, your financial situation, and the risk of an accident to decide what you need.

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