Auto Insurance

Today’s article on the types of auto insurance may serve as a great tool to learn about the types of car insurance available. There are four main types of auto insurance: liability, uninsured or underinsured motorist, collision and comprehensive and personal injury. It is required by most states to carry certain types of auto insurance.

Liability Insurance

Liability insurance is usually considered a necessity and many states have a minimum legal requirement for liability coverage. This type of insurance helps protect against injury claims and property-damage suits (up to policy limits) brought by other drivers, pedestrians or property owners if you are at fault in an accident. Your liability policy helps pay for injuries suffered by others and the cost of damage to other people’s property, as well as legal costs if necessary, up to a dollar limit.

You can choose a policy with an overall limit for all liabilities or you can select one with separate limits for (1) individuals injured in an accident, (2) all injuries in the same accident, and (3) property damage.

Uninsured or Underinsured Motorist Coverage

A policy with an uninsured motorist provision will pay damages if an uninsured motorist or a hit-and-run driver injures you and/or your passenger(s). you cannot buy more coverage against an uninsured driver than you carry yourself in liability. For example, if you carry $25,000 coverage per person and $50,000 per accident, you can buy only up to those amounts of coverage against an uninsured driver. You can also add protection against inadequate insurance coverage by another driver who injures you or damages your property in an automobile accident. This provision means that your policy will pay for injuries or damage that the other driver's policy does not.

Collision and Comprehensive Coverage

Collision insurance reimburses you for repair costs to your vehicle that were caused by a collision. While this coverage is great, please note that it can also be the most expensive. Comprehensive coverage helps pay for damage due to fire, storm, vandalism, or theft. If a lender holds a lien on your car, the lender will likely require you to pay for both collision and comprehensive insurance. To lower the cost, of this insurance, you may choose a higher deductible. Although this increases your out of pocket expenses in the event of an accident, it may result in lower premiums.

Personal Injury Protection

Residents of states with “no fault” insurance, must buy personal injury protection. Personal injury insurance will pay your medical expenses in the event of a car accident, regardless of who was at fault. When you purchase this protection, you agree not to sue for any suffering or injury you may sustain.

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