July 19, 2022

Auto Insurance Coverage Basics You Need To Know

Most people would agree that it's important to have car insurance. After all, you never know when you might get into an accident. And even if you're not at fault, chances are you'll still have to pay for some damage.

Paying for a collision repair can be very expensive, which is why we recommend coverage beyond state-required minimum liability.

Before you buy insurance, your local independent agent will ask some pretty basic questions to get the right coverage for your needs at the right price. Then, you'll have some options when picking coverages.

- What type of car do you have?

- How often do you drive it?

- Where do you keep your car overnight?

- Has your car been in any accidents in the past?

- Does your car have comprehensive and collision coverage?

- Do you have liability insurance?

3 Types of Auto Insurance Coverage You Need to Know About

There are many types of auto insurance coverage available to drivers. The three most common types are comprehensive coverage, collision coverage, and liability insurance.

When choosing auto insurance coverage, it is important to consider your needs and what type of coverage is best for you. Speak with your insurance agent to learn more about the different coverages available and to get a quote.

Reasons You Should Consider Comprehensive Auto Insurance Coverage

Comprehensive coverage is designed to protect your vehicle from damage that is not caused by an accident. This can include things like theft, vandalism, natural disasters, and more. If your vehicle is totaled or stolen, comprehensive coverage can help pay to replace it.

What is Collision Auto Insurance Coverage and Do You Need It?

Collision coverage is designed to protect your vehicle from damage that is caused by an accident. This can include things like repairs, medical bills, and more.

There are a few key benefits of collision insurance that are worth considering. First, it can help pay for the repairs to your vehicle after an accident. This can be important, especially if you don't have comprehensive coverage as well. Second, it can also help cover your medical expenses if you are injured in an accident. This can be a lifesaver, especially if you don't have health insurance.

The downside of collision insurance is that it can be expensive. This is especially true if you have a high-end vehicle. Additionally, it is important to remember that collision coverage only pays for damage caused by an accident. It will not cover things like weather damage, theft, or vandalism.

So, should you get collision insurance? Ultimately, the decision comes down to your personal needs and preferences. If you are concerned about the cost of repairs after an accident, then collision insurance may be a good option for you. However, if you are on a tight budget, you may want to consider other options.

Everything You Need to Know About Liability Auto Insurance Coverage

Liability insurance is designed to protect you from financial responsibility if you are involved in an accident that causes property damage or bodily injury to another person. This can include things like legal fees, court costs, and more.

One of the biggest benefits of liability insurance is that it can help protect you from going bankrupt in a lawsuit. If you are found liable for an accident, the other person can sue you for damages. If you don't have liability insurance, you may have to pay these damages out of pocket. This can be a very expensive proposition, especially if the accident was severe.

Another benefit of liability insurance is that it can help cover your legal fees if you are sued. This can be a lifesaver, especially if you don't have the money to pay for a lawyer. Additionally, liability insurance can also help cover the other person's medical expenses if they are injured in an accident that you are found responsible for.

The downside of liability insurance is that it only covers damage that you cause to another person or their property. It will not cover your own damages. Additionally, liability insurance has limits. This means that if the damages exceed the limit of your policy, you will be responsible for paying the rest out of pocket.

So, should you get liability insurance? Ultimately, the decision comes down to your personal needs and preferences. If you are concerned about being sued or being held responsible for an accident, then liability insurance may be a good option for you.

Because driving a car in America requires liability insurance coverage by law, every driver must understand their state’s regulations to make sure they are always properly insured.

Auto insurance is a necessary expense for all drivers. There are many types of coverage available, and it is important to understand the basics before choosing a policy. Comprehensive coverage, collision coverage, and liability insurance are the three main types of auto insurance. Each has its own benefits and drawbacks, so it is important to understand the difference before choosing a policy. Speak with your insurance agent to get a quote and find the best coverage for you.

Additional auto insurance coverage to consider

Uninsured Motorist Property Damage (UMPD)

If you don't have collision insurance, uninsured motorist property damage (UMPD) is a good option to consider. UMPD coverage will help pay for damages to your car if you are hit by an uninsured driver. This can be a lifesaver if you are involved in an accident with an uninsured driver.

UMPD coverage is not required in all states, so be sure to check with your insurance agent to see if it is available in your state. Even if it is not required, UMPD coverage can be a good idea to consider.

Uninsured/Underinsured Motorist Bodily Injury UMBI

If you are involved in an accident with an uninsured or underinsured driver, UMBI coverage can help pay for your medical expenses. This can be a lifesaver if you are injured in an accident with an uninsured driver.

UMBI coverage is not required in all states, so be sure to check with your insurance agent to see if it is available in your state. Even if it is not required, UMBI coverage can be a good idea to consider.

Medical Payments Coverage (MPC)

Medical payments coverage (MPC) is another type of auto insurance to consider. MPC coverage can help pay for your medical expenses if you are injured in an accident, regardless of who is at fault. This type of coverage can be especially helpful if you do not have health insurance.

MPC coverage is not required in all states, so check with your insurance agent to see if it is available where you live. Even if it is not required, MPC coverage can be a good idea to consider.

Rental Car Reimbursement Coverage

If you are in an accident and your car is damaged, rental car reimbursement coverage can help pay for the cost of a rental car while your car is being repaired. This type of coverage is not required in all states, but it can be a good idea to consider if you want peace of mind while your car is being repaired.

Personal Injury Protection (PIP)

Personal injury protection (PIP) is another type of auto insurance to consider. PIP coverage can help pay for your medical expenses and lost wages if you are injured in an accident, regardless of who is at fault. This type of coverage can be especially helpful if you do not have health insurance.

PIP coverage is not required in all states, so check with your insurance agent to see if it is available where you live. Even if it is not required, PIP coverage can be a good idea to consider.

Roadside Assistance Coverage

Roadside assistance coverage can be a lifesaver if you have a flat tire or run out of gas. This type of coverage can help pay for the cost of a tow truck or other services to get you back on the road. Roadside assistance coverage is not required in all states, but it can be a good idea to consider if you want peace of mind while you are driving.

Loan/Lease Payoff (or Gap Insurance)

If you have a loan or lease on your car, gap insurance can help pay off the balance if your car is totaled in an accident. Gap insurance is not required in all states, but it can be a good idea to consider if you have a loan or lease on your car.

These are just a few of the different auto insurance coverage available. Be sure to speak with your insurance agent to see what is available in your state and to get a quote. You can also learn more about auto insurance by reading our comprehensive guide.

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About the author

John Espenschied

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John Espenschied is a long-time veteran of the insurance industry. He's worked with thousands of clients over the years, helping to protect their personal and business needs. John's goal is to provide the best advice possible to assist customers in saving money while protecting their property and securing their financial future.
He truly enjoys helping others and takes great satisfaction in providing top-notch customer service. When he's not working, John has fun spending time with his family, golfing, bike riding, and blogging on insurance topics.