Auto Insurance Coverage Explained

June 25, 2010

Auto insurance is a necessity. Picking the right car insurance coverage protects you if you cause an accident, or if a tree limb lands on your car. It’s important to understand the options when you shop for quotes.

Common types of auto insurance coverage include:

  • Collision: This car insurance coverage option pays for damage to your vehicle in the event of an accident. When you get insurance quotes, be sure to ask if it covers you even if you’re not at fault.
  • Comprehensive: Of course, your car can be damaged by events other than accidents. Comprehensive coverage pays for damage caused by theft, vandalism, objects falling on your car, storms or natural disasters. Some of the most common claims include glass breakage and damage from animals.
  • Liability: This auto insurance coverage is required by law in most states. Liability covers bodily injury and property damage caused to others when you are at fault for an accident. Liability may also help cover your legal expenses as a result of a covered accident.
  • Uninsured/underinsured motorist: This coverage is designed to protect you if you are hit by an uninsured or underinsured driver. It helps cover bodily injuries to you and your passengers, and in many states it may also cover property damage.
  • Rental car reimbursement: If you have an accident, your car may be out of commission for awhile. Rental car reimbursement helps cover the costs of alternate transportation while you get your car repaired.
  • Medical expense: In addition to coverage for your physical property, you can also get insurance to help cover medical costs. This type of coverage helps cover medical expenses for you and your passengers, no matter who is at fault.
  • Loss of income: If injuries from a car accident cause you to miss work and lose wages, this coverage can be a lifesaver. It helps pay various living expenses while you recover. Consider purchasing this coverage if you don’t have disability benefits.
  • Roadside assistance: Roadside assistance and towing can help you out when it comes to things like flat tires, dead batteries, engine failure or locking yourself out of your car

This is only a quick introduction to major types of coverage. When you talk to an insurance agent to get a car insurance quote, don’t be afraid to ask more questions. For example, collision coverage may not make sense for you if you drive an older car that’s not worth a lot.

Your agent can help you design a policy that works for you. To get the best comparison on rates, it’s a smart idea to get quotes on the same auto insurance coverage options from every insurer you contact.

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