Know the Auto Insurance Coverage Types

Each and every state has its own unique regulations on auto insurance. Fortunately, the types of coverage available are basically the same anywhere you live.

Understanding State Minimums

States often have minimum requirements for the amount of coverage you must buy if you want to drive legally in that state. These three numbers are listed like so: #/#/#. How about an example?
State requirements in California are 15/30/5. These numbers represent how many thousands of dollars of coverage must be provided 1)for each person in an accident, 2) total for all injuries, and 3) to repair or replace damaged property. Technically, each number represents the maximum that can be claimed in each category.

No-Fault States

Several states require drivers to be responsible for their own party's injuries and damage, regardless of who is judged to be at-fault for the collision. Generally, you cannot file a lawsuit against the other driver unless a certain threshold of damage defined by your state is met.
Personal Injury Protection (PIP) is the type of coverage necessary for No-Fault auto insurance. Get as much as you can afford.

Fault States

When there is a dispute over who is responsible for an incident and to what degree that person is at fault, most states allow people involved in the incident to file suit. This is known as a tort liability system. If the insurer disputes a claim, a court will settle it.

These states have several types of auto insurance coverage.

Bodily Injury Liability – If you are liable or at fault for another party's injuries in a collision, this coverage will pay the damages and cover you for any lawsuits.

Comprehensive (Other Than Collision) – If your vehicle is involved in an incident other than a collision resulting in damage, this coverage will allow you to file a claim. This commonly includes:

  • Theft
  • Hit and Runs
  • Animal Damage
  • Felled Trees
  • Storm Damage
  • Other Natural Disasters

Collision/Comprehensive Collision – Whether you are at fault or not, this coverage will pay for the repairs to or replacement of your vehicle if it has been damaged in a collision. Make sure that the coverage is high enough to replace your car.
Medical Coverage – The biggest concern in any collision is human injury. With medical coverage, you don't have to worry. Your medical expenses, as well as those of the other people in your vehicle, will be paid for by auto insurance.

Uninsured/Underinsured Motorist – As many as 40% of drivers on the road do not have current auto insurance. Add to that the number of people with less than adequate coverage and you are put at significant risk should you have a collision with one such motorist. Uninsured Motorist and Underinsured Motorist Coverage protect you against these drivers.

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