Car insurance is not only a necessity for driver protection but also a legal requirement in all but one U.S. state, including here in North Carolina. The law requires only a minimum of liability coverage, which is designed to protect others who suffer losses due to your negligence. The amount of coverage provided by a liability car insurance policy is expressed as three numbers, such as 30/60/25, which is the minimum amount of liability coverage required by law in the state of North Carolina. They apply to the thousands of dollars that may be paid in a liability claim for a single accident in these three areas:
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- Bodily injury suffered by a single person
- Bodily injury suffered by all persons
- Property damage suffered
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In addition to the required amount of liability coverage, there are numerous other types of car insurance that may be added as options to your policy. Here are the most common:
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- Collision Insurance – this is meant to cover damage to your vehicle resulting from a collision with another vehicle. It may help pay toward repair or replacement of your car.
- Comprehensive Insurance – this is designed to pay toward losses from events other than collision with other vehicles such as fire, theft, vandalism, weather events, collisions with animals and more.
- Uninsured Motorist Insurance – protects you from loss in accidents caused by an uninsured driver or hit-and-run driver.
- Underinsured Motorist Insurance – helps protect you from losses from an accident caused by a driver whose insurance is insufficient to cover your losses.
- Personal Injury Protection (PIP) – may help cover medical expenses and loss of income resulting from a covered accident.
- Medical Payments Coverage (Med Pay) – may help pay medical expenses resulting from a covered accident for both you and your passengers, regardless of fault. May also help pay funeral expenses.
- Towing Insurance – can be added to your comprehensive coverage to help reimburse towing charges.
- Rental Reimbursement Insurance – helps pay the cost of a car rental if you are unable to drive your own car after an accident.
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The above-mentioned car insurance coverage types are all optional as basic liability policy add-ons. Knowing how each works is important in designing a policy that’s right for you.