The Basics of Auto Insurance

Auto insurance is illegal not to have in most states, but that does not mean you should rush into buying it without careful consideration. You want to make sure you know what you are getting into and what to expect. Even though coverage is required, you still need to make sure it works for you and that you are not just giving your money away. Here are the parts that comprise a great insurance policy.

The Parts You Need to Know

  • Bodily injury and personal liability
  • This coverage will protect the policyholder against any injuries caused to other people or other property. You are required by law in all 50 states to have at least the minimum liability coverage amounts available. You need to take note of how much each policy will cover if you are in an accident.
  • Personal injury protection (PIP)
  • This coverage will pay for medical expenses and lost wages for you and any passengers injured during the accident. Your state may not require you to carry PIP. If you have a solid medical insurance policy, then you may not need PIP coverage. If you do not have health insurance or only carry minimal coverage, however, then personal injury protection may be a smart investment.
  • Collision and comprehensive
  • These coverages contribute the most to the premiums you pay. Collision covers you for damage to your vehicle in the event of an accident, whether with another vehicle or an object. Comprehensive covers you in the event of theft or other non-collision-related damage. For example, comprehensive would provide coverage if your vehicle suffered hail damage. If you have confidence in the area you live in (as far as disasters and theft are concerned) and in your driving, then you may opt for higher deductibles on comprehensive and collision coverage.
  • Uninsured motorist
  • If you get in an accident with a driver who does not have insurance, uninsured motorist coverage will pay for your injuries. In most states, this also applies to hit and runs. If the other person does not have adequate coverage to pay for all of the damages, then underinsured motorist coverage may also pick up the tab.

Auto Insurance You Can Use

You need insurance that will actually help you, not just a form you can show people when you are in an accident. Auto insurance can really cover you in a time of need, so don’t take the decision lightly. If you are ever in an accident, you will be glad you selected a company you can trust.