The Different Types of Motor Vehicle Insurance Policies: How to Determine Which Is the Correct Policy for You

“When you’re setting up a budget, a general rule is to start with your fixed expenses – your housing and insurance payments, and car payment, if you own one.” – Jean Chatzky

Do you own a motor vehicle? If so, is it paid for? Or are you still paying it off? What about car insurance? Is it necessary? Again, if so, which policy is the best for your needs?

Everyone’s needs are unique. Therefore, there cannot be a one-size-fits-all type of policy. And, as the quotation mentioned above by Jean Chatzky highlights, one of the primary considerations to take into account is the monthly insurance premium cost. What can you afford?

At the outset of this article, the following two factors must be highlighted:

  • If you had to take out a loan to pay for your car and you are currently paying it off, the financial house or lender will require that you take out comprehensive insurance cover as one of the conditions of the loan.
  • The fundamental reason for taking out an insurance policy is to protect you against the risk of losing your vehicle in a motor car accident. However, it is equally important to note, at this juncture, that it is wise to hire an Allstate insurance attorney in Los Angeles to submit and manage your claim on your behalf. The “why” is not relevant to this discussion. But it is vital to accept this point as a fact and that it is a fait accompli should you end up in a car crash.

Types of car insurance policies

Now that we have taken cognizance of these two critical motor vehicle insurance factors, let’s look at the different types of car insurance policies on the market today:

Comprehensive insurance

Comprehensive insurance will cover damage to your vehicle for hail, theft, fire, windscreen, and vandalism damage. It’s important to note that comprehensive insurance does not include motor vehicle accident damage. It is an optional extra that you can add to your basic policy. And, you will need to take out additional cover to ensure that collision damage is covered.

Collision coverage

This insurance option will primarily cover damage to your vehicle if it collides into anything like another car, object like a tree or building, and a single-car accident. Again, it is an optional extra that can be added on top of your basic insurance policy.

Personal injury insurance

Personal injury insurance is designed to cover lost income as a result of car accident injuries. It will probably also cover some of your medical bills. It’s vital to note that this insurance type is not available in all US states.

Medical cover

Finally, medical cover is structured so that it will cover the medical bills for you, your passengers, and your family members that are a consequence of a motor vehicle crash. In other words, it will cover medical treatment for whoever was in your car at the time of the accident.

Final thoughts

It is vital to ensure that you check which of the policies mentioned above are mandatory based on which state you live in, and whether you are still paying your vehicle off or not. Once the compulsory extras have been included, the next step is to add some of these additional extras based on your requirements and available budget

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