Talking About Auto Insurance Options

A Closer Look At The Different Types Of Coverage Your Auto Insurance Provider May Offer

by Megan Ortiz

If you are new to the world of buying auto insurance, you may find yourself a bit confused by all the different types of coverage these policies can offer. Before you can choose which coverage options to include in your policy, you will first need to understand what is covered by each different type of coverage. You can discover this valuable information below.

Liability Property Damage And Bodily Injury Coverage

The first type of coverage you will see listed on most auto insurance policies is liability coverage. This is because all policies must include this coverage as a matter of law. This coverage is typically broken down into property damage and bodily injury coverage. This determines the maximum amount your insurance policy will pay for each of these categories in the event you are liable for causing an accident that results in damage to another person's property or if another person is injured. It is important to understand that liability coverage does not apply to your property and or any injuries that you suffer. Instead, this coverage is simply to cover expenses that you are found liable for in the event of an accident. 

Collision And Comprehensive Coverage

Collision and comprehensive coverage will not be included in all auto insurance policies since this is considered an optional form of coverage. With that being said, you should know that you may still be required to carry this type of coverage if you have a vehicle that is currently being financed. This requirement is set by many lenders as a condition of receiving your auto loan. The reason for this is that collision coverage covers the cost of damage to your vehicle if it is damaged in an accident that you are found liable for causing, while comprehensive coverage takes care of damage caused by other circumstances such as severe weather. If you have an active auto loan on your vehicle and the vehicle is declared a total loss, this coverage will take care of paying off your loan up to the current resale value of your vehicle. 

Uninsured Motorist Coverage

All drivers are supposed to carry at least liability insurance. Unfortunately, there are some drivers on the road who choose to break the law and drive without an active insurance policy. If you are ever hit by one of these uninsured drivers, having uninsured motorist coverage will allow you to file a claim for damages to your vehicle with your insurance company. This type of coverage is important to have even if you already carry liability and collision coverage since neither of these previously discussed coverage options will apply to an accident with an uninsured driver.

To learn more, contact an auto insurance provider in your area.