When it comes to car insurance, we try to keep you covered. And we don’t just mean in terms of basic, state-minimum liability insurance that is required of drivers in 49 states and the District of Columbia. We think you’d be hard pressed to find any driver, even those who just got their license, who didn’t know about liability insurance.
A number of states, normally those that employ no-fault car insurance systems, also require drivers to have uninsured motorist coverage. Uninsured (and underinsured) motorist coverage can protect your interests if you’re involved in a collision with a driver without insurance (or without sufficient coverage).
No fault states often require drivers to carry Personal Injury Protection (PIP) coverage as well. PIP coverage is available in all no-fault insurance states and in two tort-based states. It is intended to cover medical expenses of the insured, their family members, passengers in their car, those they have allowed to drive their car and pedestrians.
PIP offers one serious advantage to those that carry it, because it is intended to provide coverage regardless of fault, claims made will not cause a driver’s policy premiums to rise. Even if you’re not required to carry PIP, we recommend drivers do if it is available, especially if they don’t have any kind of health insurance.
We’d also have no problems thinking that most of you know about the two types of physical damage coverage to your own car, or comprehensive and collision coverage, as they are known. Collision insurance covers the costs involved to repair or replace your car when it is involved in an auto accident. Deductible amounts can be used to lower the cost of these policies, but they do require a larger payment from you before any claims are paid.
And just as with collision, comprehensive coverage is intended to repair or replace your car. But unlike collision coverage, comprehensive is only for non-crash incidents. This would include natural disasters, such as fire, flooding, hail and wind. It also covers losses related to theft. Again, you can select a deductible to lower the cost of your policy, increasing your costs in the event you have to make a insurance claim.
But these aren’t the only forms of car insurance coverage that exist – they’re just the most common and best known. Plenty of less well-known coverages exist, and some are even so uncommon they’re simply forgotten about or overlooked. Here are four less well-known types of car insurance coverage that aren’t on everyone’s radar:
Accidental medical protection
Also referred to as Accidental Death and Dismemberment, this optional coverage has two purposes: It provides lump sum coverage for dismemberment in a car accident, such as the loss of a limb or eye; and it also pays your funeral costs if you are killed in a car accident.
Some policies go beyond this and provide payment for medical expenses, so ensure you know exactly what benefits your plan offers before purchasing. Coverage normally comes into effect whether you are the driver or a passenger in a car involved in an accident.
Basic and additional reparations benefits
Basic reparations benefits shares much in common with PIP. This optional coverage can be added to your policy to cover expenses related to economic losses suffered as the result of an auto accident, including: Basic economic losses, be they health care expenses, loss of earnings from work, or any other reasonable expense; Mmedical bills, such as physician services, hospital visits, long-term nursing or rehabilitation services; and lost wages (normally capped at $200 per week)
Med Pay (also known as medical payments) is an optional coverage that pays for medical expenses for you, your family members and passengers in your car when injured in an accident, regardless of fault. This coverage often extends to you and your family if injured as a passenger or pedestrian in the event of an accident.
Medical payments coverage is available in states without no-fault insurance, and it provides payment of medical bills and funeral expenses related directly to an auto accident. In some cases, this coverage may be available to supplement no-fault coverage benefits.
Also known as Optional Basic Economic Loss coverage, this coverage is intended to pay lost wages as a result of a car accident. It covers all named drivers on a policy, as well as passengers.
Insurers generally pay up to 80% of lost wages, although you can purchase different amounts, depending upon the insurer. Benefits are normally capped at a specific amount.
Because benefits are limited, you should consider the cost-benefit of this coverage. In families where only one spouse works, this can be a valuable safety net. But if you make a large salary, the benefits may not outweigh the cost of this coverage.