Major Types of Auto Insurance Coverage

In most of the states, the government has made it compulsory to own some kind of auto insurance. The minimum liability coverage is different in different states but if you are caught without auto insurance in any such state, you may have to pay a heavy fine.

It is important to buy automobile insurance for self security also. If your vehicle is insured then you have mental security that in case of any accident the insurance company will handle the cost of repair and you don’t have to make a whole in your pocket by paying all the bills.

Auto insurance has two main categories of car insurance:
Comprehensive Insurance:

This type of insurance scheme covers almost all kind of damages except the ones that may be caused after collision of vehicles while driving. Some of the examples that include are theft, fires, falling of tree on automobile, vandalism, animal damage or flood. Comprehensive insurance is usually not compulsory and is bought more for old cars than the new ones.
Liability Insurance

This is the type of insurance policy that doesn’t cover you, instead covers you when you hit another vehicle and you have to pay the owner of that auto. It involves cost of treatment and repair for the other vehicle owner. It does not cover your own car or the cost of treatment of passengers in your car.

There are two types of liability insurance namely property damage liability and liability insurance for bodily injured. The first one that is property damage coverage is usually the minimum requirement of auto insurance coverage by many states. It will pay the bills if your vehicle damages other property like buildings, trees, vehicles or fences at time of accident.

Bodily injury liability is the second most sold coverage. It is when some party is injured due to your fault then it covers all the medical bills that may include serious and small fractures and stitches. It will not cover the treatment bills of the people who are in your car and are injured in the accident.

The type of the above auto insurance that will best suit you is driven by many factors like age, location, geography, occupation, young or old driver, etc. You should keep in mind all that and evaluate your policy premium correctly. The cost of your policy majorly depends on these factors and the amount of deductibles.

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