Auto Insurance: Four Types Of Coverage, How They Differ, And Why You May Select More Than One Type

When it comes to insuring your car or truck, there is not just one simple, straightforward option anymore. Instead, you have no less than four main options with several addenda options. The following four types of auto insurance are the most commonly purchased policies, what they cover, and why you may want to choose more than one to fit your specific needs.

Passenger Car/Truck Insurance

This is your standard auto insurance to cover you and protect your vehicle in the event of an accident. If you are just driving around in your vehicle and using it only as a passenger vehicle, then this type of insurance may be sufficient. You could also combine it with umbrella insurance for maximum coverage.

Umbrella Insurance

Umbrella insurance is like your backup coverage for a very rainy day. It protects your house, property, outlying buildings and your vehicles in the event of a major accident (e.g., some other driver smashes clear through your front windows after ricocheting off your car and a few other objects). It typically covers many of the things your car insurance, property insurance and/or homeowner's insurance does not cover. You do not have to have it or carry it, but it is nice to have if something really awful does happen.

Business Vehicle Insurance

A business vehicle is any car or truck that is used to conduct daily business. Company cars may be included in this, so long as the vehicles are driven by a chauffeur and/or the cars are not just being used as transportation between home and the office. 

Examples of jobs where business vehicle insurance is often required include:

• Newspaper delivery persons (who deliver several bundles of newspapers to a delivery hub or deliver newspapers to several miles' worth of customers)
• Taxis
• Special transport vehicles

Business vehicle insurance usually does not cover your vehicle when you are not working or driving it for the purpose of work. Ergo, most people who purchase business vehicle insurance also purchase the standard passenger car/truck insurance as well.

Commercial Vehicle Insurance

Commercial vehicle insurance covers heavy duty construction trucks, delivery trucks, commercial and city buses and any other type of heavy truck used for commercial business purposes. This insurance covers just your commercial vehicles and not the drivers, and may or may not cover damages to other vehicles depending on how your policy reads. You (or your drivers) will need additional coverage to protect them and your business from lawsuits and medical bills incurred. Contact a business, such as Holt Insurance Services, for more information.