Vehicle Insurance Coverage Options
It's important to understand the various coverage options on your auto insurance policy. The price of your insurance premium is based on the coverage options you select and the extent of the coverage you need or prefer for each. In most cases, people consider the following auto insurance coverage options:
Basic Vehicle Insurance Policy
The following coverage is requred by law and is there to protect others if you were to cause an accident.
- Physical Damage Protection - Covers damages incurred by others if you cause an accident.
- Permissive User Coverage - Covers damages incurred by others if you loan your vehicle to someone and they cause an accident.
Standard Auto Insurance Protection
These coverage options are typically included in most policies, some of which are often required by lenders if you have a loan on the vehicle.
- Physical Damage Protection - Covers repairs to your vehicle due to an accident.
- Personal Injury/Medical Coverage - Provides assistance with medical expenses incurred if you or a passenger is hurt during an accident
- Comprehensive Coverage - Covers repairs to your vehicle for damages incurred other than in a collision, such as theft or being vandalized.
- Uninsured Motorists - Pays for damages you are legally entitled to recover from another driver if that person does not have liability insurance or if your car is damaged by a hit-and-run driver.
- Underinsured Motorist Protection - Covers damages you are legally entitled to recover that exceed the coverage limits of the at fault driver.
Other Protection to Consider
- Rental Coverage - Pays for your rental car while your vehicle is being repaired after an accident or while finding a new card if yours was stolen.
- Roadside Assistance - Provides assistance with towing if your car is disabled.
- New Vehicle Replacement - Covers the full purchase price of your new car within the first year of ownership in the event of a total loss.
Know that you may have a certain amount of financial responsibility even with the coverage listed above, including deductibles, exclusions, and expense exceeding your policy limits. Your deductible will vary based on the options you select for your auto insurance coverage. Exclusions typically are in situations where you intentionally cause property damage or personal injury with your vehilce OR damages to your own car due to mechanical failure or wear-and-tear. You will obviously be responsible for any expenses that are above the capped dollar amounts of coverage noted in your policy.
GAP Insurance
Another important type of auto-related insurance is called Guaranteed Asset Protection, commonly known as GAP insurance. GAP insurance is a type of coverage that comes in handy in the event that your car becomes compeletely destroyed or stole, AND you owe more money on your car than the vehicle is valued. GAP insurance covers the difference between what your car is worth (the book value) and what you still own on it.
In many cases, the difference between what you owe and what your vehicle is worth is several hundred, even thousands of dollars. The higher the outstanding balance on your loan, the more you can benefit from this insurance. For instance, if your car is worth $15,000 and you owe $17,000 on your auto loan, GAP insurance will cover the remaining $2,000 in which you would still be responsible.
Contact RateGenius today to request a free, no-obligation auto insurance quote online, or by calling one of our insurance team members at 866-413-6768, or email us at insurance@rategenius.com.
Auto Insurance Quote, Auto Insurance Basics, Auto Insurance Savings
