Understanding your coverage options and making the right choice for you and your family can be complicated. The differences between gap, liability, collision, and comprehensive car insurance are that some protect you if your vehicle is damaged. Others protect you if someone else accuses you of causing an accident for which they are seeking financial compensation.
If you or someone you love is injured in a car accident, understanding the policy options of the at-fault driver can be equally confusing. A lawyer in your area can help you decipher complex insurance policy language and jargon. Your lawyer will obtain and complete claim forms for you and ensure you understand the benefits of each type of coverage and when each could come into play.
Understanding Insurance Options in Your State
Every state in the U.S. requires its drivers to have auto insurance or to otherwise demonstrate financial liability in the event of an accident. An insurance agent in your state will explain the minimum insurance coverage you must have and any optional types of coverage.
A personal injury lawyer in your area can also explain what each type of insurance covers, why you might need it, and how you can tap into it when you do need it.
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What Does Gap Insurance Cover?
Forbes magazine defines gap insurance as almost exactly what it sounds like — insurance that stands in the gap. For example, you have a car that is being financed, and it is totaled in an accident. If you owe the finance company more than your insurer will pay, your gap coverage will pay the difference.
Here is how it works:
- You have a vehicle for which you owe $30,000
- Its actual cash value is assessed at $20,000
- Gap insurance will pay the remaining $10,000
Without gap insurance, you will be required to pay the remaining balance to the finance company even though you no longer have the car and might still need to purchase a replacement.
What Does Liability Insurance Cover?
A car accident can be a frightening and stressful experience. If you are involved in an accident, and the injured party assigns negligence and fault to you, your liability insurance will pay the following expenses on your behalf:
- Medical bills
- Lost wages
- Property damage
- Property loss
- Physical disability
- Physical disfigurement
- Pain and suffering
- Mental anguish
- Emotional distress
If you are the injured party in an accident, the liability portion of the at-fault driver’s insurance policy will cover these same losses for you. By pursuing compensation for you, a car accident lawyer can help you avoid ongoing medical costs and extended income loss in the aftermath of a collision caused by another driver’s negligence.
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What Does Collision Insurance Cover?
Collision insurance covers the costs of repairing your car after it is involved in an accident. It would restore your car to its pre-accident condition if the accident involved:
- A collision with an inanimate object such as a tree, wall, post, or pole
- A collision with an animate object such as another car or truck
- A collision that involves your car only, such as having a tree or other object fall onto it
You typically must pay a deductible before your insurance company pays for the damages to your vehicle. In addition, collision insurance does not cover all damages involving your car. For instance, it will not cover damage caused by hail or other weather issues or damage your car causes to another person’s car.
What Does Comprehensive Insurance Cover?
While the collision insurance portion of your policy covers your car in the event of a variety of different accidents, comprehensive insurance covers many other types of damages.
It will cover accidents that are not the result of a collision. These can include:
- Theft of your car
- Fire damage
- Vandalism of your car
- Hail damage
Whether your vehicle is being financed or was paid in full will determine whether this coverage option is mandatory or optional in your case.
Comprehensive insurance could also have a deductible that must be paid. The cost of your deductible will vary based on several factors. It will also affect the amount of your insurance premiums. You will select the amount of deductible you are willing to pay when choosing this coverage.
Get Help From One of Our Team Members
The coverage options you choose when buying car insurance will protect you and your family in the event of an accident. Our legal team will help you understand the difference between gap, liability, collision, and comprehensive car insurance.
We will also help you pursue the right policy and coverage if you or someone you love was injured in a car accident. Contact our client support team at Bader Scott Injury Lawyers for legal guidance and support today.