Explain Auto Insurance

Most states require vehicle owners to cover their cars with liability insurance coverage, and many drivers carry more than their states require. However, a large number of drivers are unaware of the various benefits afforded to them under their auto insurance policies.

Automobile Insurance Policies

An automobile insurance policy is an agreement between a consumer (or an insured) and an insurance company (an insurer), which is designed to protect the consumer's financial interests if a covered loss occurs. Each contract is tailored to the needs of the insured, stipulating who will be eligible to use the policy, when the policy will be considered active or "in force," how claims for bodily injury and property damage will be addressed, and how the company will respond to lawsuits against the insured.

Liability Insurance

Liability insurance, which is included in nearly every automobile insurance policy, is designed to provide payment for the bodily injury and property damage that may occur in an automobile accident. Consumers purchase liability insurance in predetermined dollar increments and are not typically permitted to purchase limits lower than their state's legal minimum.

Comprehensive Insurance

Comprehensive insurance is designed to cover the property of the insured when losses occur that do not result from a collision. These losses can include, but are not limited to, vandalism, theft, and storm damage. Most insureds are asked to pay a deductible when comprehensive claims are filed.

Collision Insurance

Collision insurance is designed to repair or replace the insured's vehicle when his vehicle is damaged during a collision with another object. Most insureds are asked to pay a deductible when collision claims are filed.

Uninsured/ Under-insured Motorist Coverage

Consumers protect their property from uninsured and under-insured drivers by purchasing uninsured motorist and under-insured motorist coverage. This coverage is often thought of as "reverse liability" coverage, and can also be used to cover the insured's bodily injury.

Medical Payments and Other Coverage Options

Medical Payments coverage is designed to pay for the insured's medical expenses when she is injured in a covered accident, regardless of who is at fault. Insurance policies may also include "loss of use" or rental car coverage and roadside assistance.