Basic Types of Auto Insurance Coverage

There are many different types of auto insurance policies. There are three broad categories that you will need to consider before purchasing a policy: liability, collision and comprehensive. When searching for auto insurance it's important to understand the difference between these coverage classes and determine which one will suit your needs best.

Liability

Almost every state in America will require drivers to carry a specified minimum level of car insurance liability coverage. Liability basically refers to your personal and financial responsibility when you cause an accident. If you are at fault for an accident, liability insurance is designed to cover the property damage, injuries, and even death of those in the accident. Liability insurance is usually divided into three numbers on your insurance policy representing bodily injury and property damage. For example you may see something like 25/50/100. These numbers represent thousands of dollars. The first number is the maximum amount your insurance company will pay for a single person injured by you in an accident. The second amount is the maximum paid out for all persons injured in an accident. The last number covers the maximum monetary amount your insurance will pay for property damage in an accident. If you are liable for an accident and the damages exceed your auto insurance coverage limits, you are still responsible for the difference. It is always a good idea to get more than the minimum amount of coverage to reduce the chances of paying large amounts of money out-of-pocket for an accident.

Collision

Collision coverage is optional, but it can give you some protection in the event that you collide with another object. This object can be another car, or even a pole, fence or other non-vehicle. Depending on your insurance company and policy terms, you may be covered for broken glass under collision insurance coverage. Collision coverage is useful in the event that you caused an accident, but need your car repaired. If you are leasing or financing a car, your lender will likely require you to carry collision coverage.

Comprehensive

If you want even more insurance coverage, you'll want to look into comprehensive coverage. Just as its name suggest, it covers almost anything you can think of; weather damage, falling objects, earthquake, vandalism, theft, fire, and even damage inflicted by an animal. As you cn imagine, comprehensive auto insurance will make for a higher premium, but you get a broad range of protection in exchange. It is important to remember that this is simply a general summary of auto insurance coverage. Be sure to read your policy very carefully to know exactly what it does and does not cover. If you want auto insurance quotes, fill out the online form to be contacted by at least three car insurance providers who match your specific criteria.

Sources

1. Collision and Comprehensive Insurance Coverage. Retrieved April 11, 2008, from http://www.nationwide.com/comprehensive-auto-insurance-coverage.jsp
2. Collision Coverage: Don't Take Chances. (2007). Retrieved April 11, 2008, from http://www.kiplinger.com/basics/archives/2003/03/auto2.html
3. Auto Insurance Comprehensive Coverage. Retrieved April 11, 2008, from http://www.allstate.com/auto-insurance/comprehensive-coverage.aspx