Read these 14 Auto Insurance Coverage Types Tips tips to make your life smarter, better, faster and wiser. Each tip is approved by our Editors and created by expert writers so great we call them Gurus. LifeTips is the place to go when you need to know about Car Insurance tips and hundreds of other topics.
Liability insurance - the part of your insurance that pays for someone else's medical bills and car repairs - is the only auto insurance coverage type required by the state. If you have a lease or note or loan on your car, your car dealer is going to make sure you have full coverage auto insurance. If you are coming up to the end of your loan you are probably wondering when to drop full coverage auto insurance, because your auto insurance premium (price) will then go down a great deal.
Full coverage insurance is the term for the auto insurance coverage types called comprehensive and collision.
* Collision Coverage - This coverage does just what it says - protects your car in case of a collision that is your fault. Even if you collide into a stationary object like a tree, collision will be the coverage that repairs your vehicle. All you have to pay is your deductible.
* Comprehensive Coverage - It is called comprehensive because it covers almost everything that collision does not. If a tree falls on your car, if a rock hits the windshield, comprehensive is the coverage that will repair or replace your car. All you have to pay is your deductible.
Even though it is referred to as Full Coverage, it doesn't cover everything. Make sure to read your policy for any exclusions and make sure you understand what is and is not covered in your policy.
When you are in driver's education, you hear it all the time, "You have to have auto insurance!" But what is auto insurance and what does it do for you? This is a question that most adults don't know unless they've worked for an automobile insurance company.
When you pay your auto insurance company, you are buying a security blanket for your car. If you are in an accident your insurance company pays for your car (or a car that you collide with) to be repaired, as long as what happens to your car is covered by your policy. Why is this important? If you don't have $60,000 in the bank, and your car slips on a patch of ice and rams into a $60,000 car, someone has to pay for that car to be repaired. You can't. You need your auto insurance company to take care of getting that car repaired or replaced.
Each state has required minimums for automobile insurance coverage, and companies have recommended car insurance coverage levels that are usually higher than the state minimum. When you check quotes for automobile insurance coverage, you will notice the auto insurance coverage type required by the state is less expensive than the automobile insurance coverage costs recommended by the insurance company. When you look at higher minimum liability coverages, it is going to be a little more expensive.
But if your state minimum is $20,000 in coverage for Property Damage Liability, and that's all the coverage you have, that is the amount your insurance company is going to pay. That leaves you with a $40,000 dollar bill on your hands to replace that Hummer you hit with your car. That is why your insurance company will usually recommend higher coverages than the state requires.
Knowing what you're paying for makes paying for it less painful.
Car insurance Personal Injury Protection Coverage is an option for private passenger vehicles. Under this auto insurance coverage, the medical, hospital, and funeral expenses of the insured driver, any passengers in the insured car, and any pedestrians are covered. Personal injury protection coverage is only available in certain states.
When you purchase a car insurance policy, don't think "spending all you can afford" is the correct rule of thumb. Instead, ask yourself these five questions to determine the auto insurance coverage that is right for you.
1. What is the minimum car insurance coverage required by law in my state of residence?
2. What does this minimum auto insurance cover?
3. What other car insurance coverage is available?
4. What am I protecting?
5. What can I afford?
Shopping for car insurance online is a quick way to do your research quickly and thoroughly. You can compare the coverage and the costs.
The car insurance coverage required by law varies from state-to-state; however, most states require a minimum amount of Liability Coverage.
Liability coverage insures you, your spouse, family members, and anyone who uses your auto with your permission. The amount of liability coverage you select determines how much the auto insurance company will pay you in the event of an accident.
Car insurance Medical Payments Coverage is an option for private passenger vehicles. Under this auto insurance coverage, the insured driver and his/her passengers, if injured in an accident, have their medical expenses covered.
The insured driver is also covered if he is hit by another car as a pedestrian. Medical payments coverage pays the insured regardless of who is at fault in the accident, but varies based on the amount specified in your car insurance policy.
Underinsured or uninsured motorist coverage is an option for private passenger vehicles.
Under this auto insurance coverage, an insured driver and his/her passengers are covered in the event of an car accident where the other driver is at fault and does not have enough (or any) car insurance.
Uninsured motorist coverage varies based on the amount specified in your auto insurance policy.
Car insurance Bodily Injury Liability Coverage is an option for private passenger vehicles. Under this auto insurance coverage, bodily injuries that the insured driver causes to other people are covered.
Claims against Bodily Injury Liability include:
* Medical expenses
* Lost wages
* Emotional suffering.
It does not cover damage to your car. Bodily injury liability coverage varies based on the amount specified in your car insurance policy.
Approximately half of the states in the U.S. have enacted legislation for some type of No-Fault Car Insurance. In these states, the victim of an auto accident is paid by his/her car insurance company. Fault is not determined.
No-fault auto insurance was created in an attempt to reduce the number of car insurance claims and litigation. No-fault car insurance laws vary greatly from state-to-state and may or may not cover you when you drive outside the state in which your auto insurance is issued.
Most states require car owners to have a minimum amount of car insurance Liability Coverage. Liability coverage insures you, your spouse, family members, and anyone who uses your auto with your permission. The amount of auto insurance liability coverage you select determines how much the car insurance company will pay you in the event of an accident.
Car insurance collision coverage is an option for private passenger vehicles. Under this auto insurance coverage, the insured car is covered for physical damage that occurs when the it collides with another vehicle.
Coverage varies based on the amount specified in your car insurance policy. Owners of older cars with low market value should consider removing collision coverage from their auto insurance policy since the maximum collision coverage is the value of the car itself. If you are concerned about keeping your premiums low, select a high deductible for your auto insurance collision coverage.
Car insurance Comprehensive Physical Damage coverage is an option for private passenger vehicles. Under this auto insurance coverage, the insured car is covered for physical damage caused by forces other than a car collision.
Examples of covered damage include:
* Losses caused by climate
* Losses caused by animals
* Losses caused by fire
Comprehensive insurance coverage also covers damages incurred if the auto is stolen, but varies based on the amount specified in your auto insurance policy.
* To keep premiums low, select a high deductible for your Comprehensive Physical Damage coverage.
You know those commercials that say spend 15 minutes and save hundreds of dollars on your automobile insurance? What they don't tell you is that the price quoted online or by phone may only be state mandated minimum coverage. Unless you drive a beater and have no assets state-mandated minimum coverage is a poor choice. It doesn't cover you should you have an accident with an uninsured or underinsured driver. It doesn't provide enough property damage coverage that if you should be at fault in a crash and total the other driver's car, you will have enough coverage to replace it. Minimum insurance doesn't cover medical costs for people who are injured as passengers in your car. It doesn't provide coverage to replace your car is result of an accident or if you car catches fire or is stolen. In short state-mandated minimum insurance requirements are only designed to protect people from you and offer you no protection if you are at fault or have the misfortune to be involved in a crash with an uninsured or underinsured driver. Also, mandatory state limits are not sufficient in the event that you cause an accident resulting in property damage, injury to others, or fatalatiy