Basics of auto insurance coverage

If you are going to take an auto insurance policy, you need to know about the different types of coverage you can get, so that you are well-informed before you take out the policy. Here?s a list of coverage you can get with your auto insurance policy:

• • Property Damage Liability Coverage — This coverage steps in when you accidentally damage someone else?s property (for example, their home fence, car or par of their home like a wall), in a collision. If you are caught in a lawsuit for property damage, this coverage will pay for the lawsuit expenses as well. The amount of coverage depends on the limits you have opted in this coverage.
• • Bodily Injury Liability This coverage pays for injuries caused to someone else, (for example, lost wages or medical expenses) in the event of an accident. Lawsuit expenses are also covered under bodily injury liability.

• • Personal Injury Protection (PIP) This is also known as Medical Payment Insurance or Medpay. It provides for medical expenses, lost wages and other similar expenses caused by an accident in which there is serious bodily injury. This is a no-fault coverage, meaning it does not require establishing whose fault the accident is, before paying out.
• • Comprehensive Coverage This coverage provides for damages occurring to car as a result of events such as theft, flood, fire and so on. In other words this coverage caters to those events that damage you car, other than a collision.

Other Discounts

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• • Collision Coverage This coverage provides for damages occurring to your car as a result of a collision. Collisions can happen when you car strikes another vehicle hits and object or is struck by another vehicle.
• • Underinsured Motorist Bodily Injury Coverage This coverage pays for expenses (for example, medical bills, lost wages) that occur as a result of injuries or death when a driver with insufficient insurance coverage causes an accident with your car. The amount you receive is the difference between your coverage and the bodily injury coverage offered by the other driver’s policy.
• • Uninsured Motorist Bodily Injury Coverage This coverage pays for expenses (for example, medical bills, lost wages) that occur when a driver with no insurance coverage causes an accident with your car. The amount you receive is the limits of the coverage.
• • Underinsured Motorist Property Damage Coverage This coverage pays for damages (Repair and Replacement) that occur to your car when a driver with insufficient insurance coverage causes an accident with your car. The amount you receive is the difference between your coverage and the property damage coverage offered by the other driver’s policy.
• • Uninsured Motorist Property Damage Coverage This coverage pays for expenses (Repair and Replacement) that occur when a driver with no insurance coverage causes an accident with your car. The amount you receive is based on the limits set by the policy.

These are the basic types of coverage you need to know before to sign up for an auto insurance policy. Added coverage includes towing and labour costs, rental reimbursement and gap converge. However, before you take up the policy consult on details of the coverage you opt for because laws vary from state to state and you should be aware of all terms and condition before committing to the insurance policy.