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What Is Auto Insurance?

Auto insurance is a policy that helps to protect all drivers, passengers and vehicles that are involved in an accident. In many cases, having sufficient auto insurance coverage is required by law, so you don’t want to skimp out on your coverage limits.

There are two basic types of auto insurance you can get: full coverage and liability coverage. If you have liability coverage, it only protects the other vehicle and passengers in the other vehicle if you are in an accident and deemed to be at fault.

If you have full coverage auto insurance, your policy also protects your passengers and your vehicle if you’re in a wreck. There are many add-ons and stipulations with auto insurance coverage, so let’s take a look at what you need to know.

What Does Auto Insurance Cover?

Property Damage Liability

☘ This coverage helps pay to repair damage you directly cause to another person’s vehicle or their property if you’re at fault. It’s required by law in most states.

Collision Coverage

☘ This coverage helps pay to repair damage to your vehicle if you’re at fault in an accident that involves another vehicle or piece of property. It’s required if you’re financing or leasing your vehicle.

Comprehensive Coverage

☘ This coverage helps pay to repair or replace your vehicle if it was stolen or damaged by something other than a collision, like a hailstorm, vandalism, crashing tree or fire.

Bodily Injury Liability

☘ If you’re at fault in an accident that injures a passenger of the other car, or pedestrian if another vehicle wasn’t involved, this coverage will help to pay their medical bills, legal fees and loss of income.

Personal Injury Protection

☘ Whether you’re at fault or not in an accident, personal injury protection (PIP) is a no-fault coverage that helps to pay for you and your passenger’s medical bills. Some states make this coverage mandatory.

Medical Payments

☘ This is similar to PIP coverage in that it may help to pay for you and your passengers’ medical bills if you’re involved in an accident, whether you’re at fault or not. It’s different because MedPay is always optional.

Gap Coverage

☘ If your vehicle is totaled in an accident, guaranteed asset protection (GAP) coverage helps to pay the difference between your vehicle’s current worth and what you still owe on your auto loan.

Towing & Labor

☘ Whether you’re at fault or not in an accident, personal injury protection (PIP) is a no-fault coverage that helps to pay for you and your passenger’s medical bills. Some states make this coverage mandatory.

Rental Car

☘ You may add rental car coverage that pays for a rental car while your vehicle is in the shop. But nearly every auto policy also covers the vehicle and passengers when you’re driving a rental car.

Uninsured Motorist

☘ This coverage is within your own auto policy and helps to pay for repairs to your vehicle or for your medical bills if a driver who’s at fault doesn’t have auto insurance.

Underinsured Motorist

☘ This coverage is also within your own auto policy, helping to supplement the remaining expenses to repair your vehicle and pay your medical bills if the other driver doesn’t have sufficient coverage.

 

What Is Considered Full Coverage Auto Insurance?

Full coverage auto insurance simply means you maintain coverage for your own vehicle, you and your passengers’ medical expenses and coverage for the other vehicles and medical expenses for any passengers of the other vehicles involved in the accident if you’re deemed to be at fault.

Full coverage is not required by law, but it is required by the lender if you still owe car payments on your loan or you’re currently leasing a vehicle.

What Does Liability Auto Insurance Cover?

Liability auto insurance covers damage to other vehicles and medical expenses for passengers of any other vehicles if you’re involved in an accident and found liable. Liability coverage is required by law in most states throughout the country.

How Much Auto Insurance Do I Need?

Many states legally required minimum coverage limits to be obtained, which typically is far less than the amount of coverage you would actually need if you were involved in an accident and found liable.

A good rule of thumb is to get more auto insurance coverage than you think you’ll need. This means getting about $50,000 to cover damage to other vehicles and at least $100,000 to cover medical expenses for each passenger of other vehicles.

How Much Is Auto Insurance?

The average cost of auto insurance in the United States is about $1,100 per year. Keep in mind that each state has different average costs, and that your average cost depends heavily on how much coverage you maintain, which company your policy is with, your driving record and the state in which you live in.

How to Get Cheap Auto Insurance

Clovered can run multiple quotes from different providers at the same time to provide you with an auto policy you deserve at the price you want to pay. Give one of our many friendly licensed agents a call today at 833-255-4117 to get started!

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