Insurance 101
Understanding the Types of Auto Insurance
There are many different kinds of auto
insurance coverage available. While some are essential, some are not and you can
save money by only paying for the insurance coverage required by your state.
Being aware of the various kinds of auto insurance is the first step in making
sure that you and your assets are protected, but that you're not carrying more
coverage than you really need.
Common types of insurance coverage include:
Bodily Injury Liability
- Pays your legal defense costs and claims against you if your car injures or
kills someone. This protection covers you, family members living with you and
others driving with your permission.
Property Damage Liability
-Pays your legal defense costs and claims against you if your car damages
someone else's property. This coverage does not cover your property,
including your auto.
Medical Payments or Personal Injury Protection
- Pays medical expenses for you and
others riding in your car resulting from an accident. It also pays for you or
your family members injured while riding in another's car or while walking.
Personal Injury Protection (No-fault)
- Many states require that you carry this type of insurance. This
coverage pays benefits for the cost of injuries to you or your passengers
resulting from an automobile accident regardless of who was at fault in the
accident. It also applies to you and relatives living in your household who are
injured in other automobiles or who are struck by a vehicle while walking. The
main benefit of this coverage is that in an accident each driver's expenses are
paid by his/her own insurance without the need for legal proceedings to
determine financial responsibility for the accident.
Collision
- Collision pays for repairs of damage to your car
caused by a collision with another vehicle or any other object, regardless of
who was responsible.
Comprehensive Physical Damage
- Pays for damages to your car resulting from theft, fire, vandalism,
weather-related damage and many other causes.
Uninsured Motorist Coverage
- Pays damages for physical injury or death caused by an uninsured driver or a
hit and run driver who is legally responsible for the accident. Since not all
states require drivers to purchase insurance, Uninsured Motorist coverage is
essential to protect yourself.
Underinsured Motorist
- Pays benefits for bodily injury or death caused
by an insured driver whose Liability coverage limit is insufficient to cover the
losses incurred. The benefits are paid to you and any passengers in your
vehicle, or to any pedestrian you injure.
