subject: Understanding Types of Auto Insurance [print this page] Understanding Types of Auto Insurance Understanding Types of Auto Insurance
If you are looking for auto insurance it may not take long before you get confused and bogged down by legalese and terms. When you add all of the legal definitions to the fact that you don't need every little coverage on your car insurance policy, it can get downright overwhelming! Auto insurance isn't just about peace of mind however, it is also about meeting your requirements and keeping safe on the road. Here we will decipher some of that legalese for you, and help you understand exactly what you need for your insurance policy.
There are many different kinds of insurance coverages for your vehicle in the United States. Before you start seeking quotes however, it is always best to find out what kind of policy is the requirement for your state. All states in the U.S. require liability coverage, meaning it is illegal to drive on the road without this kind of insurance. Some other states require additional coverage, and some lenders that finance your vehicle will have their own requirements as well, so check your state and lender requirements before you seek auto insurance. Knowing what you do and do not need will always save you money when it comes to car insurance. Liability insurance is the insurance required for any vehicle on the road. This kind of insurance is to protect other vehicles and drivers in the event of an accident or collision that is deemed your fault. Liability coverage is often broken down into two different components, Bodily Injury Liability and Property Damage Liability. The first component will cover any damages that lead to injury on behalf of the other driver, while the second component will cover any damages to their vehicle as the result of an accident. When you are involved in an accident that is deemed your fault, you are considered liable for the other party's damages, and this is why liability insurance is a mandated requirement. If you are in an accident that is deemed the other party's fault, their liability coverage will assume your damages and loss.
Collision insurance is exactly what it sounds like, and is meant to protect you in the event of an accident that is your fault. If you are in an accident for which you are found to be at fault, your liability insurance will cover damages to any third party, whereas your collision insurance will cover your own losses.
Comprehensive insurance is another kind of coverage that is not always required. This kind of insurance covers exactly what it says, and covers all comprehensive damages or loss that are not related to collision. In other words, damage to your car as a result of theft, vandalism, fire, or natural disaster will be covered by comprehensive insurance.
When you are seeking lower auto insurance quotes, it is always best to shop around and know what you need ahead of time. Every state has different requirements, and most insurance companies today will want to give you auto insurance quotes that maximize their profit. It is not their job to tell you what you do or do not need, so you can easily get stuck spending more on car insurance than you normally would. Before you go seeking auto insurance quotes, know what you need and you will be saving money already before you lock yourself into a policy you won't need.
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