A Simple Explanation of Your Auto Insurance Coverage

If you are a new driver then you will need to get at least basic auto insurance coverage. Basic auto insurance is required by most states and gives you some basic financial protection should of an accident. Auto insurance offers coverage for:

Property Damage. Property Damage includes any physical damage caused to your vehicle through accidents, vandalism or theft. Your premium is based on the amount of property damage you cause to another person’s car. This can include theft or vandalism. In many states your premium is also determined by the value of the other person’s vehicle.

Medical Payments. A medical payment is a fee that your auto policy obligates the insurance company to pay for when you or someone else becomes injured in a traffic accident. The fee is based on how much coverage you want and also your premium. If you decide not to have medical coverage then your premium will increase.

Collision Coverage Requirements. Usually your car accident coverage requirements will include physical damage to your vehicle and medical expenses. However, in some states your coverage requirements may include rental car expenses if you are stranded due to a car accident and no one else is there to drive you to a place of safety. In some cases your coverage requirements may include extended automobile and medical benefits during a car accident that were not covered by your medical insurance coverage.

Bodily Injury Liability. Most states require you to have bodily injury liability coverage. This type of coverage protects you in the event you cause an accident through negligence or reckless driving. In addition you may be responsible for any injuries to a passenger in your car or someone else’s car that you cause in a negligent car accident. For example, if you hit a young child or elderly person with your car you may be held liable for any pain and suffering they suffer because of the accident.

Property Damage Liability. This portion of your policy pays the costs associated with repair and replacement of your vehicle if it is damaged from an accident other than a collision. This portion may also cover the cost of another car that is damaged in the accident if the policyholder was the driver of the damaged car.

Bodily Injury and Property Damage Liability will only pay the costs if you are found at fault for the accident. You are responsible for proving that you are not at fault for the accident. This means that you will have to go through a court proceeding if you want to get this part of your policy expanded. So if you have a good history of being responsible with your vehicles this may not be a problem for you.

Collision and Comprehensive Coverage. This part of your policy covers your vehicle in the event you are in a serious accident that totals out another car. This may require a higher deductible in order to make your premiums affordable. The deductible is the amount you pay before your insurer pays anything.

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