If you have ever been in an auto accident, then chances are you have a greater appreciation of your auto insurance and provider. Yes, auto insurance coverage can be expensive, but so is the alternative. However, as the cost of living continues to rise, perhaps you are considering lowering the amount you spend on auto coverage. While this is a plausible budget solution, be sure that you have made sure your auto coverage includes the basic forms of protection. There are 7 types of auto Insurance Coverage that you should have. To help you determine if you have the Insurance you need, here is a basic description of each type of coverage.
Types of Auto Insurance Coverage
- Property Damage Liability Coverage – This type of Insurance protects you if your vehicle causes damage to someone else’s property. Although this is most often their vehicle, it also covers structures, landscaping elements or other property.
- Bodily Injury Liability Insurance – This coverage option covers other people’s death or bodily injury for which you are responsible. In addition, it can be used to provide legal defense if another party involved in the accident take you to court. Claims that pertain to bodily injury lawsuits include medical bills, loss of income and pain and suffering of the other involved party, not you personally. Liability Coverage is required in most states.
- Collision Coverage- This type of Insurance Coverage is for vehicular damage caused when your automobile hits, or is hit by, another vehicle or object. It pays to repair your vehicle, less the amount of the deductible you choose. This form of auto Insurance Coverage is not necessarily required, except in cases where the vehicle is rented or leased.
- Underinsured Motorist Bodily Injury – If the person who hits your vehicle has insufficient Insurance Coverage to provide for injuries, death or damages to your family and passengers, this insurance policy makes up the difference, up to a pre-set amount.
- Comprehensive Coverage Insurance – This type of coverage protects your vehicle(s) and occasionally those of someone else (scenario depending) in situations other than a collision. Examples of this coverage are damage caused by flood, fire, animals or theft. While it is not required to have collision insurance, if you rent or lease a vehicle, most of these companies will require it.
- Uninsured Motorist Bodily Injury- When you are not at fault for the accident, but the offender has insufficient Auto Insurance this coverage option will cover members of your household and passengers for injuries, damages or death caused by the other driver’s negligence. This is also used in scenarios where the other driver has no insurance.
- Uninsured Motorist Property Damage- This insurance policy is applied in situations where the offender caused property damage and has none/minimal coverage. It typically pays up to a specific amount (varies by state) based on the policy.
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Having sufficient Insurance Coverage is simply part of being a good driver. Yes, it is an expense but it is not something that you can afford to skimp on. If you are shopping for new auto insurance, do your homework carefully so that you have all the types of Insurance Coverage you need.
Related resources for Coverage of Insurance
-Definition of Auto Insurance Coverage
-Car Insurance Coverage options – AllState
-Liability Insurance covered in detail
-Coverage characteristics of auto insurance
