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Understanding Different Types of Auto Insurance


Auto Insurance policies can be divided into different categories according to the coverage they provide. 
Broadly speaking there are four kinds of policies known as Collision Insurance, Comprehensive Coverage 
Insurance, Uninsured and underinsured Motorist Coverage policies and No Fault Automobile Insurance policy. 
Besides these, there are policies that take care of other needs like covering an auto loan, paying for towing 
expenses or paying for the cost of a rented car while your vehicle is being repaired. 
The most common insurance policies are:
Collision: Any property damage caused to your vehicle due to an accident caused by any other vehicle or 
object is covered under this policy. The claim amount cannot exceed the actual cash value of the vehicle 
and is subject to any deductible.

Comprehensive: Any property damage to your vehicle that is caused by non-collision factors like fire, theft, 
vandalism, and even natural disasters like flood, hurricane or earthquake is covered under this policy. 

Uninsured Motorist Coverage (UM) and underinsured motorist (UIM) coverage: takes cares of any injury that 
may result to you or to persons insured in your policy from an accident that takes place with another 
uninsured or underinsured driver or vehicle owner. Generally only body injuries are covered under this policy.

No Fault Auto Insurance Policy: Irrespective of who caused the accident, the insurance company pays for 
the medical expenses and for the loss of wages that the insured suffers on account of a collision under 
this policy. 

Some other additional coverage that an auto insurance policy holder can buy are:

Property Damage Liability and Bodily Injury Liability: These two policies protect the insured from any claims 
made against him for causing damage to property including vehicle belonging to another person or for 
causing any bodily injury or loss of life to other individuals up to the amount mentioned in the policy.

Auto Lease Protection: is an additional protection that you may add to your collision or comprehensive 
auto insurance policy to take care of any gap that exists between your auto loan amount and the cash 
value of your vehicle.

Full Tort and Limited Tort: available only in the state of Pennsylvania allows the insured to retain 
unrestricted rights to bring a lawsuit against a negligent party or recover expenses incurred for 
certain damages.

Rental Expense: Known as Extended Transportation Expense Coverage, the policy pays for a rental 
car while your vehicle is being repaired or replaced.

Medical Payments Insurance covers medical expenses for injuries sustained in an accident involving 
any vehicle for the insured, his passengers and other parties irrespective of whose fault it is. 

Towing and Labor: An additional coverage option that can pay for all necessary towing and labor costs 
to tow your damaged vehicle to a work shop or another location.







About the author:
Marcus Dubois is a veteran in the insurance industry, and recommends InstaQuoter to get an instant 
auto insurance quote. See http://www.instaquoter.com/auto/ for more information





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