Overview of Types of Vehicle Insurance Coverage

Most states require minimum amounts of auto insurance be carried on their vehicle at all times to comply with state Financial Responsibility laws. Minimum amounts required vary state-to-state, but it is important to understand the many different types of coverage that may be required and that is available to consumers.

Bodily Injury/Property Damage

All state required insurance policies include these two types of coverage. While state minimums often fall very low, it is recommended that at least $100,000 i Bodily injury coverage be carried, along with $25,000 in Property Damage coverage. The amount of coverage you choose is the amount that the auto insurance company is willing to pay for one or more persons injured in an accident. Property damage coverage pays for repairs to property that are a result of an auto accident. These coverages pay for damages caused by you to the other party.

Personal Injury Protection

Personal Injury Protection( PIP) is similar to Bodily Injury coverage, only this type of coverage pays medical expenses if you are injured in an at-fault auto accident. PIP is most often optional coverage, and it may not be a necessity if you have a good health insurance policy.

Collision Coverage

Collision is another coverage you might want to consider purchasing. Many people are unaware of the fact that basic coverage does not include the costs of repairs to their own personal vehicle. Adding collision coverage to your policy ensures you will not be left in the cold with thousands of dollars in repair costs. Collision coverage will pay up to the Kelley Blue Book value of the vehicle for repairs after an auto accident. Many cars under lease must carry collision per agreement with the finance company, however, anyone with a newer model car should consider this coverage.

Uninsured/Underinsured Motorist Coverage

Some states require this type of policy while others do not. This coverage helps cover the costs of damages in an accident with a driver without auto insurance, or whose policy amounts will not cover the entire costs of the damages.

Comprehensive Insurance

Comprehensive auto insurance may also be required on a car that is leased, but is not mandatory, in most cases. Comprehensive coverage pays for repairs to your automobile that are an “Act of God”. The coverage has broad limits as to the description of an “Act of God”. Though each policy varies, most policies cover things such as theft, flood, fire, tornadoes, vandalism, or other natural disaster. This coverage is great for anyone who wants to be fully protected.