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Your Guide to All Types of Auto Insurance

types of auto insurance

According to the National Safety Council, a typical car accident where no one is injured costs $12,500. Crashes involving injuries result in tens of thousands of dollars in damage. 

The sheer cost of an accident alone means it’s crucial to understand the types of auto insurance available, as well as what your state requirements are in terms of your coverage minimums. 

Keep reading to learn more. 

Types of Auto Insurance

Auto insurance can be complicated. If you’re in an accident, you’ll want to already know what your policy is and how you prove that you’re covered. For example, SR22 is a document issued from your insurance carrier to the state. 

If you’re in the market for a new auto insurance policy, we can help. But, first, let’s take a look at the most common types of auto insurance.  

Liability Coverage

Liability coverage is mandatory in most states across the U.S. To abide by your state law, you need to purchase at least the minimum amount of liability coverage. For example, Texas auto insurance requires at least $30,000 of coverage for injuries per person. 

There are two components to liability coverage: bodily injury liability and property damage liability. Body injury liability pays for injuries if you cause an accident. Property damage liability pays for damage to another person’s property. 

Uninsured and Underinsured Motorist Coverage 

In the event you’re hit by a driver who flees the scene, doesn’t have insurance, or has a limited policy, uninsured and underinsured motorist coverage can help pay your bills.

Some states require this type of coverage, while others do not. For example, newly written Indiana auto insurance policies have to include this type of coverage unless specifically rejected in writing. The bodily injury coverage is $50,000.

Comprehensive Coverage 

Comprehensive coverage pays for all types of damage to a vehicle, like theft, fire, hail, and more. Most of the time, comprehensive coverage has a deductible, which you’ll need to pay out of pocket before the insurance company takes care of the rest. 

While this coverage is often optional, if you finance or lease a vehicle, the lender will require comprehensive coverage. 

Collision Coverage 

Collision coverage is also typically optional. For example, if you’re in a crash and strike an object like a fence, collision coverage can pay for the repair or a replacement of your vehicle. 

Medical Payments Coverage 

Medical payments coverage is optional in some states and required in others. This coverage can help pay for medical bills associated with accident-related injuries. 

Personal Injury Protection 

Personal injury protection, also referred to as PIP, is only available in certain states. For example, while PIP is not available on Illinois auto insurance, it is available and required in Maryland. PIP is used to pay for medical bills, lost wages, child care expenses, and more. 

Learn More About Car Insurance 

While the coverages listed above are the most common for car owners, additional coverage options are out there. 

If you’d like to learn more about the types of auto insurance and what policy would be best for you, contact us today. 

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