A to Z Guide to Auto Insurance Information.

Every year, over 12 million auto accidents occur in the United States. Every time someone gets behind the wheel of a car they are potentially putting themselves and others in harm’s way, regardless of their driving skills and abilities. With such a potential for injury or damage, it is obvious why every single state requires drivers to have sufficient insurance to protect themselves and others.

Unfortunately, many consumers are yot aware of the intricacies of car insurancey. Every car insurance purchase should be considered as important as the decision to purchase the car that is being insured. Understanding the various components of car insurance is the only way someone can make an educated insurance purchasing decision and obtain the proper cove






Types of Car Insurance

Car insurance policies may contain various components, but due to the industry’s heavy government regulation, the definitions of each component are standardized across the nation.

Liability Insurance: Most states require drivers to have liability insurance. Liability insurance provides drivers with coverage to other vehicles that have been involved in an auto accident or their vehicle when another car is not at fault. Many states may have “no fault” laws, but liability insurance does not provide blanket coverage that protects drivers from possible litigation

. However, liability insurance does lessen the likelihood of a lawsuit because it provides parties that are not at fault with insurance that covers property damage. Minimum liability insurance coverage limits are typically based on the average vehicle cost, but those with luxury cars may suffer damages that exceed policy limits.

 Therefore, it is recommended that drivers consider insurance that exceeds the minimum state requirements in order to protect themselves from personal liability. According to the  Financial Success Initiative, “Driving without insurance can lead to fines up to $500-not including court costs, and even license suspension.

Bodily Injury Liability: Most states also require drivers to carry minimum bodily injury insurance coverage. This insurance component provides drivers and passengers of the vehicles that are not at fault in an auto accident with insurance coverage for any medical expenses that they may incur from being injured in an accident. As with liability insurance, it is recommended that drivers purchase more than the state mandated minimum coverage in the event of a serious accident that may require extensive medical expenses.

Property Damage: Nearly every state requires property damage insurance as well. Property damage coverage is another type of liability insurance that covers the expenses of physical property damage.

Collision Insurance: Collision insurance refers directly to damages incurred from an auto accident between two vehicles on the road. For example, if a car collides with another vehicle on a road or vice versa, then the other car would be covered.

Comprehensive Insurance: This type of car insurance is not required by state laws, but it is necessary to protect a driver’s vehicle in the event that the other driver involved in an accident does not have liability insurance coverage. Unlike other types of insurance that are aimed at protecting other drivers, comprehensive insurance is more akin to self-insurance. 

In addition to protection from accident-related damages, comprehensive insurance also provides coverage for theft, scratches, storm damage, and any other events that may cause damage to the inside or outside of a person’s vehicle. USA.gov gives the following advice, “Raise your deductibles on collision and comprehensive coverages. If you have an old car, you might want to drop these coverages altogether.

Personal Injury Protection PIP Most states also do not require Personal Injury Protection, but most drivers should consider this important insurance coverage. Unlike comprehensive insurance coverage that covers property damage to a policyholder’s vehicle, PIP coverage is designed specifically to cover hospital bills related to a car accident that a policyholder has been involved in.

Uninsured and Underinsured Motorists Coverage Although minimum liability coverage is required in nearly every state, there are many drivers who neglect this law and do not carry insurance. Due to the vast amount of uninsured and underinsured motorists on U.S. roads, most states now also require drivers to have some variation of UIM insurance coverage. UIM insurance coverage is designed to protect drivers who have been involved in an auto accident in which the at-fault party does not have enough insurance, or any at all, to cover the cost of the damages.

These types of insurance coverage are components of most car insurance policies. Most states may only require minimum liability insurance coverage, but some require drivers to also have UIM, PIP and other forms of insurance. Anyone planning on leasing or financing a vehicle should also note that lenders require much higher coverage limits than the minimum liability limits.

How to Save Money on Car Insurance

Thankfully, most car insurance companies provide drivers with multiple ways to save on their car insurance. Drivers can take advantage of the following valuable car insurance discounts to save on their car insurance costs

Safe driver discounts

GPA discounts for students under the age of 25

Occupation-based discounts and discounts for low-mileage drivers

Good credit discountsDiscounts based on preferred payment method

Discounts for having vehicle safety features like dual-front airbags and anti-lock brakes

Multi-policy discounts for having other insurance products with the same insurance company

Car insurance is a vital necessity for anyone who owns or drives a vehicle. With many different coverage options, it can be difficult choosing the proper coverage. Every situation is unique and should be examined carefully before making a coverage decision. 

Thankfully, there are trusted advisors and insurance professionals available to answer any insurance-related questions someone might have and help them choose the best policy for their situation.

conclusion.