Common Questions About Car Insurance Answered

While most drivers are familiar with the basics of automobile insurance, what exactly does car insurance cover? Depending on which coverage you select, what your policy covers will determine the extent of your policy. The most common coverages include liability, comprehensive, collision, and medical payments. Personal injury is also covered. These coverages can help you decide what kind of policy you need. A lender may require that your vehicle has certain coverages, such as collision and comprehensive. Every state requires some type of car insurance. Below are the most popular insurance types.

Liability

Liability insurance is required in most states to be able to drive a car. If you are involved in an accident, this type of insurance will cover your bodily injury and other property damage. Liability is usually designed to protect other drivers, but uninsured motorist coverage helps you protect yourself in the event that an uninsured/underinsured driver strikes you.

Collision

Collision coverage can help you pay for repairs or replacement of your vehicle following an accident with another vehicle. Sometimes insurance companies may not cooperate and you may need legal assistance if the accident was not your fault. This type of insurance typically requires a deductible that ranges from $250 to $1,000. Most lenders require a $500 or less deductible. Higher deductibles will reduce your premium costs. A deductible is an out-of-pocket expense that you pay for a collision. If your car sustains $4,000 of damage and you have $500 deductible, the insurance company will pay $3,500 to cover the accident.

Comprehensive

Your car insurance policy may include collision and comprehensive coverage. This is because even if you are not in an accident, you still have protection against theft, vandalism, and windshield damage. The deductible for this coverage is usually the same as that for collision coverage. This coverage is typically required by lenders to have a $500 deductible.

Medical Payments

It is not uncommon for medical costs to be very high. This coverage pays for medical expenses after an accident. No matter who caused the accident, medical payments will be made. If you do not have any health insurance that covers accidents, this insurance is ideal.

Personal Injury Protection

Personal injury insurance typically covers specific medical expenses as well as loss of wages resulting from an accident. This coverage typically covers up to 80% of medical expenses and related losses. Your policy will determine the amount of coverage.

All states require automobile insurance in order to drive vehicles. There are many coverage options. The type of coverage you need will depend upon your circumstances and whether you have a lien on your vehicle.
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