Everyone who drives needs auto insurance. In fact, most states require it by law. When you buy auto insurance, you are buying what is called an automobile policy. Your insurance policy is based on a variety of factors including what kind of car or truck you drive as well as what kind of insurance you feel that is adequate for you. Auto insurance policies have different types of insurance coverage included.
The first thing to understand about an auto insurance policy is to learn the different types of coverage insurance companies offer. The State you live in will require liability and some of the other coverage may be optional.
•Liability – This coverage pays for accidental bodily injury and property damages that you cause to others. Injury damages include medical expenses, pain and suffering and lost wages that you cause to oters. Property damage includes damaged vehicles or property. This coverage also pays defense and court costs. State laws determine the amount of liability coverage you must purchase, but you can always get more coverage than your state requires.
•Collision – This coverage pays for damages to your vehicle caused by collision with another vehicle or object.
•Comprehensive – This coverage pays for loss or damage to the insured vehicle that doesn’t occur in an auto accident. The types of damages comprehensive insurance covers include loss caused by wind, hail, fire, flood, vandalism, and theft.
•Medical Payments Coverage – Pays medical expenses regardless of fault when the expenses are caused by an auto accident.
•Personal Injury Protection (PIP) is required in some states. This coverage pays medical expenses for the insured driver, regardless of fault, for treatment due to an auto accident.
•Uninsured Motorist – Pays your vehicle’s damages when an auto accident is caused by a driver who doesn’t have insurance.
•Underinsured Motorist – Pays your vehicle’s damages when an auto accident is caused by someone who does not have adequate liability insurance.
•Rental Car Reimbursement – This type of coverage will pay for a rental vehicle if your auto is damaged due to an auto accident. Often this coverage has a daily allowance for a rental vehicle.
The first thing in choosing the insurance you want for your auto is to know the laws in your state. This will tell you the minimum liability insurance you need for your auto. It’s good to keep in mind that, just because your state may not require extensive insurance, extra coverage may be worth the extra expense. After all, who wants to be stuck with thousands of dollars worth of bills because of an auto accident.
