If you own a car, it is required by law to have auto insurance. Before buying just any auto insurance, however, it is important for you to understand the different types of auto insurance coverage so you can make an informed choice when deciding what type of coverage to get for your particular needs.

Auto insurance coverage types

Liability insurance

This type of auto insurance coverage is actually what car owners are legally required to have. Under this type of coverage, your insurance company will pay for all the damages on the other vehicle that you may have caused during an accident. However, the insurance holder (you) will have to pay for the repairs of his own car.

Bodily injury liability

This auto insurance coverage applies to the bodily injuries of the other driver whose car you collided with. This coverage includes payment of all medical bills incurred during the treatment of the other driver's injuries. It also protects you against any possible suit or legal claim that may be filed by the other party involved in the accident.

Personal injury protection insurance

This covers all the injuries that you, the insurance holder, may suffer, as well as the injuries of your passengers at the time of the accident. Under the policy, you can claim for any loss of wages should you be unable to work because of your injuries due to the accident.

Collision insurance policy

This is one of the most popular types of coverage bought by car owners. This covers all damages to your vehicle in the event of a car crash regardless of who is at fault.

There is, however, a provision on deductible. You will be responsible to pay for a certain amount of the repair. The insurance company pays for all the other expenses over and above the deductible amount.

See also: Evaluate your deductibles

Comprehensive coverage

Comprehensive coverage offers full protection against risks of fire, theft, vandalism, and acts of nature. This is aside from the usual insurance coverage against loss or damages in cases of car collisions even if you are the one at fault.

This type of auto insurance coverage is also subject to deductibles. You have to shoulder a portion of the cost of damage before the insurance company pays.

Uninsured and underinsured motorist coverage

This type of auto insurance coverage will insure you against hit and run incidents, as well as damages in an accident caused by a driver without the proper insurance coverage at the time of collision. Know that there are some car owners who don't have auto insurance despite the legal mandate.

How to buy auto insurance

When you have understood the different types of auto insurance coverage, you could easily choose which type you would want for your vehicle. Of course, you will need to consider how much you can afford to pay for your auto insurance. It would help if you get individual quotes from different auto insurance companies and then decide.

Do not be content with one or two quotes. You should ask for auto insurance coverage quotes from a number of companies either by phone or by going online.

This is the only way you can shop intelligently, by comparing their rates and packages side by side. A detailed comparison of the various packages and their rates will give you a very good idea on the best deal you can get based on the average market prices.

Remember that the highest quote is not necessarily the best package you can get and similarly, the lowest is not always an excellent choice. Choose the auto insurance coverage that more than meets your requirements and fits well within your budget.

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