You Must Know About Different Types Of Motor Insurance Policies

If you are a resident of New York, you must buy automobile insurance and no-fault insurance. According to New York State law, no-fault insurance must have a minimum coverage value of at least $50,000. No-fault types of insurance are particularly beneficial as they provide coverage for medical expenses and, even in some cases, for loss of wages to the passengers in the car. Unlike other insurance, these benefits are applied to anyone who was in the car, regardless of whose fault it was. 

New York and twelve other states have mandated the drivers to opt for no-fault types of insurance since the functionality of this insurance fast-tracks the claim process and reduces the number of lawsuits. Besides no-fault or personal injury protection insurance, there are other types of motor vehicle insurances that you can consider. Here are some of the different types of motor vehicle insurances that you can consider.

1. Liability Car Insurance

Liability insurance primarily covers the medical bills of others that are involved in the accident and even for the damages to the vehicle that you caused. However, it does not provide coverage for any expenses for the driver or any of the passengers. When it comes to liability car insurance, it does not matter whether you need it or not, but in most states, it is mandated by law for you to have one if you wish to drive legally on the road. 

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2. Collision Car Insurance

A collision car insurance will cover damages for your vehicle if you are ever involved in a car accident and hit a stationary object, get into a single-car accident, or get into an accident with another car. A collision car insurance is mandated for drivers who have the car on a loan or a lease. Moreover, collision car insurance will cover the cost of any repairs or damages. So, it is best to get one if you can sustain any unexpected prices. 

3. Comprehensive Car Insurance

Unlike other types of insurance, comprehensive car insurance covers damages to your vehicle that are caused by any other reason besides an accident. So, if someone has vandalised your car or a branch fell on the windshield, then comprehensive insurance would cover the cost of repairs. It is a good idea to get comprehensive insurance if you can’t afford any unexpected repairs. 

4. Personal Injury Protection Or No-Fault Insurance

Such insurance will cover all medical expenses for you and the passengers involved in the car crash. Unlike other types of insurance, no-fault insurance may even cover expenses such as loss in wages, child care, and in some cases, even the costs of a funeral. As per the NY no-fault insurance rules, a person needs to be insured for at least $50,000.

No-fault insurance is compulsory in thirteen states around the country that include: Florida, Michigan, New Jersey, New York, Pennsylvania, Hawaii, Kentucky, Massachusetts, Minnesota, North Dakota, and Utah. Moreover, Puerto Rico is also on the list since it is a US territory. 

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5. Uninsured Or Underinsured Motorist Coverage

There are times when people get involved in an accident with an uninsured driver who is not covered by any type of insurance that might cover the expenses of your damages. There are twenty-two states in the country wherein it is compulsory to buy uninsured coverage, such as Connecticut, District of Columbia, Illinois, Kansas, Maryland, Maine, Minnesota, Massachusetts, Missouri, Nebraska, North Carolina, New Hampshire, New Jersey, New York, North Dakota, Oregon, South Carolina, South Dakota, Vermont, Virginia, West Virginia, and Wisconsin. One should buy this kind of insurance if you do not have any overlapping coverage such as no-fault insurance or collision insurance. 

6. Medical Payments Coverage

This kind of coverage is also known as MedPay, and it covers accident-related expenses for the passengers. In addition to providing coverage, a MedPay will cover the copays of other insurance policies. From a broader perspective, MedPay is very much similar to no-fault insurance, but it has more limited coverage and scope. Also, MedPay is compulsory for drivers in New Hampshire and Maine. 

7. Guaranteed Auto Protection

The moment you drive off your new vehicle within or outside the city, the overall value of the vehicle starts to depreciate. So, in case of an accident that renders you totally damaged, the insurer will only pay you the real cash value of your car after adjusting for depreciation. In many cases, this amount often comes out to be a lesser amount than you already owe to the bank. So, gap insurance will prove beneficial to pay the amount between the balance of your loan amount and what your car is actually worth. 

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8. Rental Reimbursement

If your car is in the repair shop, you still need a rental for your daily commute. The cost of a rental car will be covered by rental reimbursement insurance. However, the insurer will only pay up to an extent, but it is often enough to cover the majority of the rent. 

9. Mechanical Breakdown Assistance

This is a type of insurance that can cover the cost of mechanical repairs. Mechanical breakdown assistance is similar to extended warranties and service contracts, but you pay monthly rather than a lump-sum amount. 

10. Umbrella Assistance

It is not a type of car insurance per se but rather broad-level liability protection. Umbrella liability protection covers assets of $1 million or more. 

11. Usage-Based Insurance

This is not a unique or different way of paying for insurance, but it is just a new way to pay for different types of insurance. So, depending upon your driving habits and various other factors, the insurer might offer other discounts and benefits. 

Besides these eleven types of insurance and add-on coverages, there are still more types. You must research thoroughly before choosing the types of insurance you need. 

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