The 5 Main Types of Auto Insurance Coverage Explained

Comparison shopping for auto insurance doesn’t have to be a daunting task. Knowing what is required by law and the five main types of auto insurance available will help streamline the process and help you make an informed decision about the coverage that’s perfect for you. 

Liability Coverage

This coverage is required in almost every state. The amount of required coverage varies between states, and it is recommended that you purchase coverage that exceeds the state’s minimum requirement. Liability coverage pays the costs for the other driver’s expenses following an accident. If you are deemed to be at fault, this extra amount of protection can be beneficial, as costs exceeding your policy maximum are your responsibility. Deductibles will apply.

Collision Coverage

Typically, collision coverage is only required for leased or financed cars. Collision coverage pays for repairs or replacement of your vehicle, whether or not you were responsible for the accident. Deductibles will apply.

Comprehensive Coverage

This insurance coverage includes costs from damages not sustained in a collision. Theft, vandalism, severe weather, fire and animal damage are examples of incidents that fall under comprehensive coverage. This is an optional policy in most states. However, if the vehicle is financed or leased, it may be a requirement of the lease or finance document. Deductibles will apply.

Personal Injury Protection (PIP)

PIP is optional coverage in all but 12 states. This coverage will pay for both direct and indirect medical expenses following an accident. While it’s optional, PIP is strongly recommended for your policy if it’s available in your state. It will cover you and your passengers for injuries resulting from an accident. With the costs of healthcare on the rise, PIP provides an extra layer of financial protection from potential medical costs. Deductibles will apply.

Uninsured/Underinsured Motorist Protection

Regardless of fault, if you’re involved in an accident with an uninsured or underinsured motorist, this type of policy will pay out for vehicle damage and medical expenses associated with the accident. While only required in 20 states, uninsured/underinsured motorist coverage is suggested to protect you from incurring unnecessary costs when damages exceed their maximum coverage amount. It is an inexpensive addition to your policy and protects you in the long run. Deductibles will apply.

Take your time and do your research before making a decision about your auto insurance purchase. Nsure can help you find the perfect auto insurance plan by comparing quotes in minutes from 50 leading insurers.