Basics of Car Insurance Coverage

Car insurance is needed by anyone who owns and drives a vehicle and it is important to know some basic information about the coverages that are included on a policy. A car insurance policy includes collision coverage, comprehensive coverage, and bodily injury coverage. Most states require people that own their own vehicle to purchase and maintain coverage on the vehicle.

One of the most important and most basic coverage that is included on a car insurance policy is called collision coverage. Collision coverage pays for any damage to an insured vehicle that results from an accident with another vehicle. Usually, an accident has to occur while driving on a road or highway for this coverage to be in effect. Coverage limits are available ranging from $40,000 to $300,000 or more depending on the amount of coverage that is needed. It is important to purchase an adequate amount of collision coverage on a car insurance policy or risk being underinsured

Another coverage that is included on a car insurance policy is called comprehensive coverage. This coverage was designed to pay for non-collision damage such as hitting a deer, vandalism as well as theft. When traveling on a road or highway the most common type of damage done to a vehicle is caused by hitting a deer or other animal. However, in the event a vehicle is ever vandalized or stolen it is the comprehensive coverage on the policy that will pay for the damage. Unlike collision coverage comprehensive coverage covers damage if a car goes into a ditch or is damaged in a parking lot.

One coverage that requires a mandatory coverage amount in most states is for bodily injury and liability. Usually the minimum coverage amount is set at $40,000. Bodily injury coverage pays for injury that is sustained to individual’s that are involved in an automobile accident. This can include the driver and passengers in another vehicle as well as passengers in a person’s own vehicle. Bodily injury coverage also includes liability which pays for legal costs if an insured is ever sued. If a person in injured in a state that has no fault insurance laws a claim needs to be filed with a person’s own insurance company.

Most states require that people who own a vehicle purchase and maintain insurance coverage on that vehicle. If an insured gets a ticket for driving without insurance they will pay more for a policy when they attempt to purchase one. States that have no-fault insurance laws require insurance coverage in order to pay for benefits.