Are you looking around for your next car insurance policy, but feeling slightly overwhelmed by all the different options available?
If the answer’s yes, then fear not, because despite there being a wide range of car insurance policies, once you understand how each of them work, you’ll be well on your way to finding the right insurance for you.
Perhaps you’re wondering – what’s the minimum coverage requirement? What is telematics insurance? Can you get full coverage insurance?
In this article, we’ll answer all your questions regarding the different types of insurance available.
Read on to learn more.
Liability insurance
Liability insurance is the minimum legal requirement for car insurance in most states. This type of insurance coverage is for accidents that you take liability for, but it only covers the other person for damages, not you.
You may be involved in an incident where you’re at fault, such as a collision with another car, or maybe property damage to someone’s fence or wall.
Seeing as though you were at fault, your insurance would need to cover the other person for damages, which could include repairs or medical bills, for instance.
Damages to you or your car, however, are not covered under this insurance policy.
Full coverage insurance
Full coverage insurance is the name given to an insurance policy that essentially ‘fully’ covers you for a range of incidents. This policy is in itself a combination of three main types of coverage – liability, collision, and comprehensive coverage.
Liability coverage is explained above.
Collision coverage is used to cover you when you have a collision with another vehicle, paying you to repair any damages to your car. If the other driver was at fault, their policy should naturally cover your damages.
Comprehensive coverage is for all other types of damage that may be inflicted on your car, other than a collision. Examples include fires, theft, earthquakes, or damage from things like falling trees.
With all these coverages combined into one policy, you are a fully covered driver.
Multi-car insurance
Multi-car insurance is a type of policy that works just as a standard insurance policy would, except it allows you to have coverage for multiple vehicles at once.
If you have a number of vehicles that need insurance, where you might’ve needed to insure every one of your vehicles individually, this policy allows you to have coverage over every vehicle at once.
On top of this, you’re able to customize the specific coverage for each vehicle, whilst still having it under one policy. This means you have the benefit of tailoring which vehicles have certain types of cover according to your needs. You may have a car that’s used much less than the others, and therefore requires only liability coverage, with others needing full.
Also, the main advantage of this type of cover is that it enables you to have discounted premiums on your insurance that’s cheaper than it would be if you were to insure every car individually.
This way, you’re receiving the same type of coverage, but at a discounted rate.
Telematics insurance
Telematics insurance is a policy that uses telecommunications technology to analyze how you drive, so this can be reflected in your insurance premium.
The technology usually comes in the form of a chip installation or a software implemented on your phone.
It can extensively analyze various aspects of your driving behaviours, such as how well you adhere to speed limits, if you break in good time, and can manage your maneuvers safely.
Once the data is provided to your insurer, they can adjust your premium accordingly.
The safer you drive, the lower the cost of your car insurance.
With so many options to choose from, take time to consider what insurance type you’ll benefit from most, and which provider can give you the best premium rates.
