To make an informed buying decision for your auto insurance, you need to fully understand your coverages. If you are new to auto insurance coverages or want to refresh your knowledge, this article will help you better understand auto insurance coverages. Each state has different limits and laws. Check with your individual state if you need state-specific information.

liability insurance

Liability insurance pays for property damage or physical injury caused by you to others. The state minimum coverage is generally not enough and varies by state. Available coverage limits vary by carrier. Consider how much you have to lose in a lawsuit and how much coverage you can afford, and make sure you purchase an adequate amount of liability coverage to limit your exposure in the event of an accident.

collision coverage

Collision covers repair costs to fix your vehicle after an accident when you are at fault. The deductible is the portion for which you are responsible. Typical deductibles are $250, $500, and $1,000. A higher deductible will result in a lower premium and a lower deductible will result in a higher premium.

Comprehensive coverage also known as other than collision (OTC)

Comprehensive coverage covers damage to your car, excluding accidents, including damage from theft, fire, vandalism, flood, and hail. Deductible applies.

Rental and towing coverage

If you have comprehensive and collision coverage, some companies offer rental and towing coverage. In the event of an accident, the rental will pay for a rental car up to the limits you purchase. Different companies offer different amounts and they usually range from $20 per day to $40 per day and a maximum of 30 days. Vehicle disability towing coverage up to limits typically between $50 and $150.

Personal Injury Protection

Personal injury protection is like a small medical policy that covers everyone in the vehicle in the event of an accident and can cover additional expenses like lost wages. PIP coverage is generally sold in increments of $2,500, $5,000, $10,000.

Medical coverage

It is like a small medical policy that covers the medical expenses of all the occupants of the vehicle in the event of an accident, no additional expenses are covered. PIP is generally preferred over Medical. You can have PIP or medical coverage, but not both in one policy. Medical coverage is generally sold in increments of $2,500, $5,000, $10,000.

Uninsured and Underinsured Motorist Coverage

Uninsured or underinsured motorist coverage pays for costs related to injuries to you or your family members and guests in your car and/or property damage caused by an uninsured or insured motorist. insufficient in an accident. The limits offered are the same as the liability coverage in your policy. Most companies will let you buy less, but you can’t buy limits higher than what you have in your liability limits. Make sure you have enough coverage; This is the coverage that protects you, your family and friends in the event of an accident with the uninsured or underinsured. $250 deductible applies.

Some companies offer additional coverage, such as roadside assistance, accident forgiveness, and new car replacement, to name a few. These are additional coverages and will increase your premiums. Use the coverage tips above to help you make a good decision when shopping for your next auto insurance policy.