There are a lot of factors that influence an auto insurance policy, and every policy offers different types of coverage as well. This section of Best Auto Insurance will look, in detail, at what makes up an auto insurance policy so you can fully understand how your car insurance coverage works. Remember the amount of coverage you have determines the cost of your premium.
There are several differences in an auto insurance policy based on the types of coverage you can receive:
- Liability Coverage
- Comprehensive Coverage
- Collision Coverage
- Medical Coverage
- Personal Injury Coverage
- Uninsured Motorist Coverage
- Underinsured Motorist Coverage
- Rental Reimbursement
- Extended Coverage
The most notable of these are liability coverage, comprehensive coverage, and collision coverage. The amount of coverage you have on your policy determines the cost of the premium. Let’s look at each of the above in detail.
Liability is coverage for accidental injury to other people and damage to other people’s property. This includes hospital visits, car repair, court visits, and defense attorney costs. It is a property-related coverage, and is always required by law.
Comprehensive coverage includes damaged sustained outside of a traditional auto accident. This can include damage caused by natural occurrences such as fire or wind, or human causes such as theft or vandalism. Again it is property-based, but is not required by law.
Collision coverage is what covers your own vehicle in an accident caused by another person. It is a property-related coverage, and is always required by law.
Medical and Personal Injury Coverage
There are various medical-related types of coverage, including personal injury coverage and medical coverage. Both medical coverage and personal injury coverage cover the insured drivers regardless of who was at fault. While all policies have medical coverage, only some states require specific personal injury coverage as well.
Uninsured Motorist Coverage
Uninsured Motorist coverage protects you from a driver that gets into an accident with you, and has a policy that does not meet your state’s minimum standard or simply does not have insurance. In addition, with this coverage you are not at risk if the other driver’s claim is denied and they cannot afford to pay.
Underinsured Motorist Coverage
Underinsured Motorist coverage protects you by paying the full amount of damages to you if the person who hit you reaches a payment limit that does not reflect the total cost of the damages. This coverage extends to every one who drives your car and can be expanded to encompass the same people riding in different cars.
These factors are the major factors behind the cost and coverage of an auto insurance policy, and different states have different requirements as to how much coverage is the bare minimum to legally drive on the roads. For example, California has a 15/30/5 requirement, which means $15,000 of medical coverage per driver/$30,000 of medical coverage for two drivers/$5,000 of property coverage. We will look at those in more detail in the state section.
These are important factors to consider when shopping around for auto insurance coverage. Best Auto Insurance will help you find car insurance rates that fit your budget as well as your state’s minimum requirements. Because so much goes into your auto insurance policy, take the time to get informed by using Best Auto Insurance’s various sections to learn the ins and outs of how car insurance coverage works.