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The Most Common Types of Auto Insurance

If you buy a vehicle, one of the first things you need to buy along with it is auto insurance. Auto insurance is a requirement for all vehicle owners to have and it can really come in handy if you ever get involved in an accident. There are various types of auto insurance that you need to be aware of in order to pick the one that works best for you. They include:


1. Liability auto insurance

Liability insurance covers all financial damages to other parties involved in an accident where you were at fault. This type of insurance is a requirement for all vehicle owners to have under the laws in most US states. This ensures that all drivers that cause accidents can compensate the other people involved in the accident who were not at fault.

Liability insurance is usually quoted in limits that are displayed as follows: 30/50/10. These numbers indicate the maximum amount that the insurance company will pay out and any damages exceeding these limits will have to be paid from the insured party's pocket.


There are 2 types of liability auto insurance:

a) Bodily injury liability - this is the most common form of auto insurance as it's required in all states. It covers you when an accident you caused leads to injuries or death to an innocent party. Your auto insurance provider steps in to cover the other party's medical costs, lost wages, or funeral costs in terrible scenarios. It even covers legal fees if the other party decides to file a lawsuit.

b) Property damage liability - this covers damage to other people's property as a result of an at-fault accident. For instance, if you lost control of your vehicle and crashed into someone's shop, your property damage liability would pay for the repair cost.


2. Collison Coverage

This type of insurance is not a requirement, but it is very important to have as it pays for the repair costs for your own car if it turns out you were at fault in the accident (if you are not at fault, the other driver's property damage coverage will cover your repair costs). Even if you are the best driver in the world, there's always a chance that you could crash or get into an accident where you're partially at fault. If you don't want to risk having to pay for the repair costs yourself, get your vehicle some collision coverage.


3. Comprehensive coverage

This covers all physical damage to your vehicle that is not covered by collision coverage. This includes things like vandalism, theft, hitting a large animal, or damage from natural disasters. It only covers automotive damage and won't cover any personal items lost, such as the car radio or a laptop sitting in the car.


6. Uninsured/underinsured motorists coverage

It is possible to get into an accident with an uninsured driver or a driver whose insurance policy is unable to pay the full liability they owe you in an accident where you are not at fault. In this case, Uninsured/underinsured motorists coverage covers the bodily injury liability as well as property damage liability which the at-fault party was supposed to cover.


7. Medical payments coverage

Accidents can result in huge medical bills. This type of coverage pays for medical costs after a covered accident regardless of the at-fault party.