7 Types of Car Insurance Coverage Explained

Car insurance is comforting when you’re confronted with car repairs, but it becomes downright necessary when you’re responsible for medical expenses that go with a car accident. In the UK, insurance is a legal requirement before you take your car on the road. There are several options available, which make it difficult to decide what car insurance is best. Your budget, vehicle and legal requirements will in part determine the type of insurance you eventually choose.

Liability Insurance

This is the most basic type of insurance and will be the minimum requirement for driving in most places. If you’re found at fault in a car accident, liability insurance will help you to cover most of the expenses including medical bills. Since this insurance is basic, it makes sense to go beyond this type of coverage and get more comprehensive cover so that you’ll be completely protected if you ever find yourself in an accident. 

Collision Insurance

The biggest drawback with liability insurance is you’ll have to pay for repairs for your own car if it’s damaged in an accident. Collision coverage passes the buck back to your insurance company, so they’ll pick up the tab for damages to your car. Although collision coverage is not mandatory, it is nice to have if you don’t have a sizeable emergency fund to repair your car at a moment’s notice. So if you drive a newer car, this type of insurance might just be worth having.

Comprehensive Insurance

Liability and collision insurance are helpful if your car is damaged after an accident, but what happens if your car is damaged in some other manner? Comprehensive insurance will repair or replace your car if it’s damaged by any other means – the weather is one example. The unpredictable happens at the most inopportune times, but with comprehensive insurance you’ll be prepared for anything. The cost of comprehensive insurance may put off most motorists, but appropriate discounts – safety and no claims discounts– it will be more affordable. You might want to skip this type of coverage if your car is an older car.

Uninsured Motorist Protection

Just because the law states that everyone needs to have insurance doesn’t mean that everyone will obey. Even if the other driver has liability insurance and they’re at fault for an accident where your car is involved, the coverage may not be sufficient to cover all of your expenses. An uninsured or under-insured motorists’ policy will serve as a safety blanket to cover all the extra expenses when you need it.

Medical / Personal-Injury Protection

The costs associated with treating injuries as a result of a car crash can add up quickly, so you need to have sufficient coverage to offset those expenses. Medical / Personal-Injury Protection will cover medical bills for both you and your passengers no matter who happens to be at fault in the accident. Medical and Personal Injury Protection are especially important if you don’t have health insurance.

No-Fault Insurance

This type of insurance covers injury and property damage no matter who is determined to be at fault for the accident. The choice to carry this type of insurance will depend on availability and on the other types of coverage you carry.

Gap Insurance

Gap insurance is a perfect solution for motorists who are still paying on their car loans. If the car is totaled in an accident, the insurance will pay the balance owed on the loan. Your lender may require that you purchase Gap insurance if you take out a sizeable car loan. It ensures that they get paid if something happens to the car.

These are the major types of insurance and the areas that they cover. Learn the various terms in order to determine what car insurance is best for your personal needs. Remember to list clearly the coverage you’re looking for especially when you’re comparison shopping online. This way you’ll compare like-for-like cover. The right amount of coverage is just as important as the right type of coverage, so crunch your figures with care because your insurance could make a difference between peace of mind and financial ruin.

Sam Jones the author advises readers looking for car breakdown cover to visit uSwitch.com a price comparison website where all the main providers can be compared.