Types of Car Insurance in US

Car insurance can be defined as a system that is put in place to protect the purchaser (of the insurance) against any sudden financial losses pertaining to the owned vehicle due to unforeseen circumstances.

Liability Insurance

  • Liability Insurance is one of the sub-categories of car insurance offered in USA. This is generally counted under general insurance systems and is a type of risk financing for the client by the insurance company.
  • This coverage, by the definition of its nature, protects the purchaser from liabilities pertaining to lawsuits and other similar claims. If the claim is covered by the company, then all the aspects pertaining to the issue are taken care of via insurance.
  • This is usually done by the insurance companies in return of some sort of premium payments. This kind of insurance is specifically designed as a protection against third party claims.

Collision Coverage

  • Collision Coverage is another type of car insurance offered by many insurance companies in USA. This type of insurance offers coverage for a vehicle that is insured which has been in an accident that may have led to the damage of the vehicle.
  • It is designed in such a way that the insurance company has to make payments for the repair of the vehicle. In the case that the vehicle is beyond any repair, the purchaser of the insurance is liable to receive the full cash value of the vehicle in question, by the insurance company.
  • This type of insurance is optional but many car rental companies often apply for this specific type of insurance and call it Collision Damage Waiver (CDW) or Loss Damage Waiver (LDW). This scheme is however subject to a deductible.

Comprehensive Coverage

  • Comprehensive insurance coverage is a scheme that provides for any type of loss incurred without the vehicle in question being involved in any collision. The damage caused by unfortunate incidents can take a heavy toll on the finances.
  • In case the vehicle being involved is in fire (unforeseen accident), theft or even an attempted theft, vandalism, natural disasters (Hurricanes for example) etc, the losses are all covered under comprehensive coverage.

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