Car Insurance Basics

The basics of car insurance for most begins with liability insurance. This insurance for your autos will cover damages that you may be found liable for in case of accident or negligence that you are responsible for. This coverage for liability is typically mandated by all states to cover the cost of indemnifying the other party. Of course the limits are different state by state as to how much liability insurance an individual must have but generally it is somewhere around $50,000. This can be determined by talking to an insurance agent in your state.

Many individuals will also carry coverage for the loss or damage to their auto as well. This normally is written as “Comp” (comprehensive) and “Collision”. This amount of coverage is typically written as Actual Cash Value of the auto minus the deductible. “Collision” coverage will insure your vehicle if your at fault and your auto is damaged whereas “Comp” will cover your vehicle for any other damage to your vehicle other than a collision. Keep in mind that if your vehicle is damaged and it’s found to be not your fault then the other party involved, if there is one, is responsible for taking care of your costs.

Another coverage that many will purchase along with their auto insurance is “uninsured” or “underinsured” auto coverage. This protects the policy holder from loss resulting from another’s fault and the owner at fault doesn’t either have sufficient limits or no insurance at all. The uninsured or underinsured coverage steps in and will cover the policy holder up to the specified limits. Generally the limit here reflects the liability coverage limits.

Some other coverage that some purchase are “Personal Injury Protection” and “Towing”. Keep in mind that there may be other coverages available that are only offered in your specific state and then other coverage that may not be covered or available. Of course by consulting with your local insurance agent this can be easily determined. Keep in mind that many auto insurance companies like Progressive, Nationwide, Allstate to just name a few normally have different bells and whistles they include. So be sure to shop around and find what best fits your basic auto insurance needs.

Category: Auto Insurance