Auto insurance coverage types to consider

When it comes to auto insurance coverage, the legislative requirements in all US states except three are very strict: you have to carry a state required minimum amount of coverage in order to drive a vehicle legally. Auto insurance coverage is delivered through the means of an insurance policy, which is a contract between you and the provider. This document contains all types and amounts of insurance coverage you can take advantage of in case of an accident. And quite often buyers don't take much time to learn what is contained within their policy, buying the first cheap policy they come across. However, knowing the types of insurance coverage and what they are used for is essential for minimizing your costs, as you will feel more confident when adjusting coverage amounts.

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Liability coverage

Liability insurance coverage is comprised of two main elements: bodily injury and property damage liability. As you can understand from the names of these elements, they pay for medical and property damage costs delivered by your car during the accident. Liability coverage is required in all states where auto insurance is mandatory, although the minimum required amounts vary from state to state, so make sure to check the requirements for the place of your residence.

Collision and comprehensive coverage

Collision and comprehensive are two separate types of auto insurance coverage, which are very often bundled into a single product by the providers. And no wonder, as these coverages deal with the damage delivered to your vehicle during a collision. The main difference, however, is that collision coverage pays for the damage resulted from an accident with another vehicle or infrastructure (signs, fences), while comprehensive deals with all other circumstances such as fires, earthquakes, riots, theft, vandalism, storms, floods, etc. Make sure to read your policy careful in order to learn which situations are covered and which aren't under comprehensive coverage.

Medical coverage

This type of coverage is purely optional in most states. It pays for the medical costs resulted from a traffic accident, regardless of who is at fault.

Personal injury protection

Certain US states require drivers to carry this type of coverage, which pays for the injuries and covers medical costs if you were affected by the accident.

Uninsured or underinsured driver coverage

Due to the fact that not everyone can afford or wants to spend their money on auto insurance, there are millions of underinsured and even uninsured drivers out there on the road. And having an accident with such a driver means that your expenses won't be covered, because he or she simply doesn't have the coverage required for that. That's when uninsured and underinsured driver coverage comes in handy. It will pay for the costs the other driver had to cover as if it was his insurance company paying.

There are other additional types of coverage that you may find useful, and that are purely optional. Consult with your insurance agent regarding this question and see if you can afford to pay more for the additional coverage.