What Are the Different Types of Auto Insurance?

People depend on their cars to take them to school, work, and even around town. There are numerous responsibilities that come with owning a car and one of the most important is auto insurance. By law, people need to have car insurance to drive a motor vehicle. There are multiple types of auto insurance Newark DE that drivers should know.

Liability Only

In most states, liability only is going to be the minimum amount of car insurance someone can have and still operate his or her car legally. While many people are looking to save money, car insurance might not be the place to do this. With liability only, the policy will only pay to fix the car of the other driver. Liability only will not pay to fix the car of the policyholder. This means that if someone with this type of insurance is blamed for a car accident, he or she is not going to receive money to repair or replace the damaged car. For this reason, most people should invest in a higher level of coverage.

Collision Insurance

One of the most popular types of car insurance is called collision insurance. Also called collisions coverage, this plan will pay to fix both cars in the event that the policyholder is blamed for an accident. In some cases, this policy might also pay to repair or replace a car that is damaged in a single-car accident. The types of collisions that these policies cover varies from policy to policy. Therefore, drivers need to read the fine print carefully to understand what is covered and what isn’t.

Comprehensive Coverage

Of course, there are numerous ways in which a car might be damaged. One example involves natural disasters including tornadoes, hurricanes, floods, and more. Natural disasters are usually not covered by collision policies. Instead, drivers need to get comprehensive coverage. Also called Act of God insurance, this is a policy that will pay to fix the car for anything that is not the intentional act of the policyholder. For people who want to protect their car against everything, this is the policy to choose.

Find the Right Policy

It is critical for drivers in Newark, DE to understand the differences between these types of auto insurance. Some people are going to require more coverage than others. Be sure to ask questions about the coverage of the policies avoid overlooking important details.