Auto Insurance Basics – Know Your Coverage

Do you know what’s in your auto insurance coverage? This article covers mandatory and optional car insurance so that you can make informed decisions about which ones fit your budget while meeting your needs.

Mandatory Coverage

To fully understand how the state mandatory requirements affect you, contact your insurance agent. However, most states demand the following coverage types as a condition of driving legally:

  • Bodily Injury Liability: Pays for costs related to injuries or death in an
    accident you cause.
  • Property Damage Liability: This coverage handles other vehicles or
    objects that you hit while driving your car. This may include a building, fence, or utility pole.

You may also need the following coverage:

  • Personal Injury Protection or Medical: Reimburse you for injuries to you and your passengers. It covers lost wages from missing work and other expenses.
  • Uninsured Motorist Coverage: Covers you if an uninsured driver hits your car or if you
  • Underinsured Motorist Coverage: Pays for additional costs if the at-fault driver has inadequate coverage.

Although state law may not require PIP or uninsured/underinsured, you may wish to purchase them, if available, for more comprehensive coverage.

Optional Coverage

Aside from legally required coverage, you may want to get additional coverage for your car. Choose from the following optional auto insurance coverage:

  • Collision: This car insurance option pays you back for damages to your car that happen due to a collision — even if it’s your fault. For example, if you hit a tree, collision insurance would pay the property owner to treat or replace it. Keep in mind that collision insurance won’t cover accidents due to poor maintenance or mechanical failure. However, it will pay for rolling over your car or monster pothole damage.
  • Comprehensive: Often, drivers use various car insurance options to make sure they are fully covered. Comprehensive insurance safeguards your interest if someone steals or vandalizes your car. This includes fire, flood, fire, and road hazards. Your agent can explain the difference between collision and comprehensive coverage.
  • Glass Coverage: Every accident is different but few of them occur without accompanying glass damage. For windshield damage, you car insurance policy could include no-deductible glass replacement. This is ideal for expensive accident repairs that don’t exceed the deductible but cost you money. Supplemental glass coverage pays for rear windows, sunroof, and side windows.

Now that you know the basic types of car insurance, you can make an informed decision on what works for your driving needs.