New Car Owner? 2 Types of Auto Insurance Explained

If you are a teen and have recently passed your driving test, then you may be ready to start looking at vehicles to purchase. This also means that you will need to buy auto insurance to cover yourself and others in the case of an accident. Auto insurance policies can be quite confusing, especially if you are looking at one for the first time. You may expect to see basic collision and liability coverage, but there are several other types of coverage you will need to pay for as well.  Keep reading to learn about a few of these different types of coverage that may not be familiar to you.

Uninsured Driver Coverage

About 12% of all drivers on the road are uninsured. If you cannot prove that you have car insurance on your vehicle, then you are legally supposed to turn your plates into the local DMV. License suspensions are also possible if you drive without auto insurance. However, some people will keep their car's plates and drive with an expired license even though they are not supposed to.

In a typical situation, auto insurance pays for the damages caused during an accident. If one driver does not have insurance though, then there is no company to pay for repairs or medical bills. This leaves the insured driver with little financial recourse and the driver must be sued directly if you want to receive compensation. This is a long and expensive process.

To protect you from individuals who drive without auto insurance and to also help you with damages that occur during hit and run incidents, your insurance company will offer uninsured motorist protection. Your insurance company will pay for your vehicle damages as well as your injuries if an incident occurs with an uninsured driver. Underinsured protection is offered as well. This helps to pay for any damages or injuries that were not covered by the other driver's insurance policy.

Comprehensive Coverage

You likely have heard of comprehensive auto insurance, and you may know that it helps to pay for damages that occur when you break your windshield or hit an animal in the road. However, the coverage actually pays for quite a few other things as well. Basically, comprehensive insurance helps you pay for any damages or thefts outside of an accident with another vehicle. 

A few things that comprehensive coverage can protect you from include fires, floods, falling objects, and vandalism. The coverage does not help you pay for damages that occur to property though. For example, if you run into a deer and your car veers to the side of the road and hits a mailbox, the insurance will not cover the cost of the mailbox. Your liability insurance will cover this. 

Comprehensive insurance will typically pay for a rental car if your vehicle needs to be repaired after an auto accident. However, it will not pay for things like roadside assistance or towing services that are needed to transport you or your car after an incident occurs. Basic services like battery assistance on the side of the road and tire changes are not covered either. These are basic maintenance tasks that are your responsibility. 

Also, while comprehensive insurance does offer coverage in a wide range of situations, you will typically have a deductible. A deductible is the amount of money you will need to pay before the insurance company will start to pay for damages. Some insurance policies have deductibles that are as low as $100, while other have ones that are $1,000 or more. This type of deductible may seem high, but opting for a policy with a higher deductible can help to decrease your overall auto insurance costs, so consider this when looking at your policy. 

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