What do the Different Types of Auto Insurance Mean?

What do the Different Types of Auto Insurance Mean?

Every motorist from the teen taking Driver’s Ed to the seasoned driver knows that having a valid insurance policy on a motorcycle, car or truck is the law.  Of course, the first thing a police officer asks for after a traffic violation or an accident is proof of insurance and an I.D.  But why is insurance so important?

It is difficult to be proactive when money is hard to come by, especially when that means paying extra costs that are meant to protect against situations that we all try to avoid.  Accidents are just that, however, unforeseeable incidents.  So how can we protect ourselves and our autos?  Let’s review the most common policies and you decide which is best for your needs.

Most Popular Insurance Coverages

Liability– This is just what it sounds like, liable.  You are liable or responsible to pay for the other driver’s injury or damage to their vehicle, however, this policy does not cover costs to your own vehicle or personal injury.  This most basic form of auto insurance is popular due to its lower price tag…but in the long run is this coverage benefitting you?

Collision- If you get into a wreck either with a stationary object such as a tree, or even with another moving vehicle, this policy will help replace or repair the cost of the damage made during the collision.  Depending on what type of vehicle you own or whether you are purchasing or leasing you may be required to carry collision insurance in the event of a crash.

Comprehensive- Comprehensive is usually an add-on to collision insurance.  This policy will help protect your vehicle from damage not caused by an accident.  Think car theft, baseball through the window, or a fallen tree limb; any of these can cause damage that could cost big dollars to fix unless you are covered through a comprehensive policy.

Personal Injury Protection- PIP as it is commonly referred to, is insurance that covers medical expenses for either or both parties regardless of who is at fault. 

Uninsured/Underinsured Motorist Coverage– Unfortunately, not all motorists are insured.  Of course, they are breaking the law driving uninsured, but they put other drivers in danger too.  No one expects to get into an accident when they commute to school, work or travel, but we do expect that the person at fault is held responsible.  If you carry this type of insurance your medical bills or auto repair will be covered in this unfortunate event.

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