Car Insurance Coverage Options

Almost every driver has auto insurance, but sometimes they don't pay attention to what is actually covered. They might buy the minimum amount of insurance required by the state, or rely on their lender to tell them how much coverage they should get. In some states, the minimum amount of coverage is very low, and you might want to purchase more insurance. If your car is paid off, you may or may not want to purchase some of the optional insurance that is available. By knowing what your auto insurance policy covers, you can make a more informed decision when you call for a quote.

Bodily Injury Liability

Bodily injury coverage protects you in case you or one of your family members gets into an accident with another vehicle and cause someone to get injured. Many states have low minimums for this coverage, so you may want to purchase more than the minimum amount, especially if you have a home and savings that someone else can sue for.

Personal Injury Protection

If anybody in your car is injured while someone is driving your car, this coverage can kick in. It will cover any medical costs, loss of wages, and the cost that it takes to replace services that the injured person normally performs. It might also pay for funeral costs.

Liability for Property Damage

If someone is driving your car and causes damage to another car or other type of property, property damage liability will cover it. Some states have very low property damage limits, and when you consider that some of the cars on the road cost 30, 40, or even 50 thousand dollars, if you caused enough damage to total another vehicle, your insurance wouldn't be adequate. As with bodily injury liability, you probably want to purchase more coverage if you have a large amount of savings or equity in a home.

Uninsured and Underinsured Motorist Coverage

Uninsured and underinsured motorist coverage kicks in if you get into an accident with a hit-and-run driver, an uninsured driver, or a driver that doesn't have enough insurance to cover the damage caused in the accident. It also will cover you if you get hit by a car when you are a pedestrian. The coverage is relatively inexpensive, and is well worth purchasing, especially in a down economy when some people have cut back on their auto insurance policies.

Comprehensive

If your car is damaged from something when you are not driving the car, comprehensive insurance will cover you. This would include fire, flooding, or even a tree falling on your car. If you borrowed money for your car, your lender probably requires that you purchase this insurance. If you own your car outright, you may or may not want the insurance. Comprehensive insurance is probably a good idea if your car is worth a lot of money, but if your car is worth $2000 or less, the cost is probably not worth it.

Collision

Like comprehensive, many lenders will require you to purchase collision coverage. Collision coverage will pay you whenever your car sustains damage while it is driving. Collision coverage will pay for damages even if the accident is your fault. If the other party is at fault, your insurance company will try to get the money from the other insurance company, and will refund your deductible. If your car is old, paid for, and not worth very much, you might want to skip collision insurance, as the cost of this insurance makes it not worth purchasing this coverage for cheaper cars.