In the state of Michigan, including areas such as Troy, Bloomfield Hills, Birmingham, Macomb County, Oakland County, and Rochester, all drivers are legally required to have an auto insurance policy that has at least a minimal amount of coverage. If you are new to car insurance, these policies can be a little confusing at times. It’s important to know that while there are many kinds of auto insurance, there are 3 types of coverage that everyone should know. In this article by E&Y Insurance Agency, we break down the 3 types of car insurance, so that you’ll be more informed and aware the next time you read through your auto insurance policy or sign a new one.

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What are the Types of Car Insurance?

Liability Coverage

Liability coverage, offered by most insurance companies in the United States, is a mandatory type of car insurance that all drivers must have. When you cause a car accident, you are legally responsible to pay for the damage caused to others or to property that doesn’t belong to you. Being covered by liability insurance, means that this responsibility will be out of your hands, and will be taken care of by your insurance company instead. This type of car insurance comes in two forms: bodily injury liability coverage and property damage liability coverage. If someone is hurt in the accident, the first type takes care of any medical (and related) expenses incurred by the person to which you have caused bodily harm. If any property damage occurs during the accident, the second type will help pay for the necessary repairs or replacements that need to be carried out.

Collision Insurance

Whereas liability insurance pays for the damage caused to others or their property, collision insurance will cover any repairs or replacements needed for your own vehicle, regardless of who is at fault. If you were involved in a major accident, and the cost of repairs are considered to be higher than the value of the vehicle, this is the type of car insurance that will help to write-off your car, and offer you the money in the sum of the vehicle’s value. In other words, if your car is “totaled,” collision insurance will consider your car scrapped, and send you a cheque for enough money to replace your vehicle with a similar one.

When you sign an insurance policy that includes collision insurance, there will generally be a deductible that you will have to pay towards your car’s damage or replacement, and any amount (up to a certain cap) after that will be covered by your insurance agency.

Comprehensive Coverage

Although many tend to think of car accidents or collisions as the only thing that can happen to your vehicle, there are certainly other incidents that can cause damage to your Michigan car. This is what comprehensive car insurance was designed for. Comprehensive insurance, which is not always included in every insurance policy, covers incidents such as natural disasters, vandalism or theft, broken or shattered windows, damage caused by animals, and damage caused by falling objects.

What Types of Car Insurance Does E&Y Agency Cover?

As one of the best insurance companies in the Michigan area, E&Y Agency has many different forms of auto insurance. Based on your needs and budget, a dedicated representative will match you with the type of insurance that is right for you. If you are residing in Troy, Bloomfield Hills, Birmingham, Macomb County, Oakland County, or Rochester, Michigan and are in need of auto insurance call us at 248-671-6860 or fill out our contact form.