Auto insurance is very important for all car drivers to have, and in at least 47 of the United States, it is a requirement. There are many different types of policies available to most drivers, and you need to know the major distinctions before committing to a policy that may – or may not – be right for you. Some auto insurance may be required by your state, but some may be optional.
Liability auto insurance covers accidental bodily injury and property damage to others. This includes medical expenses, pain and suffering and lost income, as well as defense and court costs. Property damage includes automobiles and damaged property such as yards, fences and the like. Collision insurance pays for damages to your car caused by a collision with another car or object. Personal Injury Protection (or PIP), required in some states, is coverage that pays the medical expenses of the insured driver, no matter who might have been at fault, for any treatment of injuries resulting from a car accident. Uninsured or Underinsured Motorist insurance pays for your car’s damages when an auto accident is caused by a driver who has insufficient liability insurance or no liability insurance at all. Comprehensive auto insurance pays for loss or damage to an insured vehicle that wasn’t in an auto accident but might have received damage from fire, flood, winds, theft or vandalism.
Neither collision nor comprehensive auto insurance is a requirement in any state. However, because it covers such a wide range of situations, comprehensive auto insurance is recommended for all drivers on top of their state’s minimum requirement. There are some limitations to comprehensive auto insurance because it does not cover auto accidents, but it does cover things like theft, fire, natural disasters, riots, missiles, vandalism or hitting an animal in the road. Cracked windshields are also usually covered under a comprehensive policy. Collision insurance is also good to have along with comprehensive auto insurance since it protects drivers in case of fender-benders with other cars, objects, people or the surface of the road. In addition, it will cover the driver whether or not he or she is at fault for the accident, as well as repairs, towing and damages.
However, there are some cases in which the purchase of both comprehensive and collision auto insurance are required, especially in the case of financing a car. The lender for your car loan may require you to carry these coverages at certain levels so that even if the car is destroyed in an accident; there will be funds available to cover the remainder of the loan. Generally, comprehensive and collision auto insurance are offered as bundled packages, although you can purchase them separately as your particular situation or state dictates.
Purchasing auto insurance doesn’t have to be as confusing as it sometimes seems. By knowing what your state requires and what your own needs are and the price you want to pay for your coverage, you should be able to find the right policy.
