Car Insurance Coverage for Every Circumstance

By on June 18, 2020
Insurance coverage

No one likes thinking about auto insurance, let alone shopping for a new policy. But if you’re a first-time car owner or have been on the same plan for years, you may save a good deal of money if you do the research and shop around for the best insurance coverage deal.

This process, however, can still cause a headache. Car insurance laws vary by state, insurance providers offer numerous options and add ons, and assessing policies requires familiarity with auto insurance jargon.

Understanding Auto Insurance Law

Almost every U.S. state requires some level of car insurance coverage. However, the specific requirements vary—each state sets its own numerical minimum requirements for each form of auto insurance coverage. Furthermore, some coverage forms that are mandatory in certain states are optional in others.

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Before doing any further research about your policy options, look up the state laws regarding auto insurance in your state.

Breaking Down Policy Bundles

In general, six different forms of insurance coverage compose a collective auto insurance policy. They include:

  • Bodily Injury Liability– Covers the associated medical costs of injuries to another person(s) caused by the policyholder. (Legally required in most states.)
  • Collision– Covers the cost of damages to the policyholder’s vehicle if they get into an accident with another car and are at fault, hit an object, or roll or flip their car without the involvement of another vehicle. (Optional in most states.)
  • Comprehensive– Pays for damages to the policyholder’s car that result from something other than an accident. (Optional in most states.)
  • Personal Injury Protection (PIP)– Helps cover the associated medical costs (and sometimes lost wages) of injuries to the policyholder and their passengers in the case of an accident. (Optional in most states.)
  • Property Damage Liability– Covers damages caused by the policyholder to someone else’s vehicle or property. (Legally required in most states.)
  • Uninsured/Underinsured Motorist Coverage– Pays for a policyholder’s expenses should she get into an accident with an uninsured or underinsured driver. Underinsured or uninsured motorist coverage also covers hit-and-run accidents in some states (Legally required in most states.)

Assessing the Circumstances

Whose insurance and which form of coverage will help pay the expenses for car-related damages or injuries entirely depends on the surrounding circumstances. One way to make the insurance shopping process a bit simpler is to consider each scenario in which you’d need to use your car insurance, and figure out which type of coverage you’d use in that situation.

While the following list of circumstances is not comprehensive, it should give you an idea of which coverage type applies when:

Bodily Injury Liability

  • You are found at fault in an accident which injures another driver
  • You are found at fault in an accident which injures a passenger in the other driver’s car

Collision Coverage

  • You veer off the road and your car flips, resulting in damage to the vehicle
  • Another driver hits your vehicle and flees the scene (in some states)
  • You hit a guardrail and damage your vehicle
  • Your spouse, who is on your auto insurance, damages someone else’s property while driving

Comprehensive Coverage

  • You hit a deer and damage your vehicle
  • A tree falls on your vehicle due to a storm
  • Someone vandalizes or breaks into your car

Personal Injury Protection (PIP)

  • You’re injured in an accident and found at fault
  • You’re found at fault for an accident and your passenger, who isn’t on your auto insurance policy, is hurt

Property Damage Liability

  • You hit a parked car with your vehicle, causing damage
  • You cause an accident, resulting in damage to the other driver’s car

Underinsured or Uninsured Motorist Coverage

  • A driver without insurance damages your vehicle
  • Another driver hits you or your vehicle and flees the scene (in some states)

Getting Proper Coverage

As a car owner, you need to research each of these insurance coverage types and decide which ones to include in your policy. Keep in mind that insurance providers can base your rates of numerous factors such as your age, gender, location, driving record, and credit score.

To make an informed decision, don’t be shy about contacting insurance agents for more information. At each company that you seriously consider, request a quote.

Go with the Best Auto Insurance Provider

Finding the right auto insurance policy isn’t just about finding the lowest rates. While the price is a major decision-making factor, consider your specific needs and identify the policy that will serve those needs. Remember, car insurance isn’t a one-size-fits-all product, and it’s worth doing the research to get the best coverage at the best rate.

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Car Insurance Coverage for Every Circumstance