Types of Auto Insurance - Six Main Types

Everyone knows that you need auto insurance because it is required by law. What also is important to understand is that there are different types of auto insurance. When you understand the differences between the policies, you will be able to select the one that is right for you.

The different types are body injury liability, personal injury protection, property damage liability, collision, uninsured motorist, and comprehensive.

Although some type of auto insurance is required by law in most states, you are probably not required to include all of them in your policy, which is great because some people do not find that all of the policies are necessary to them. Knowing what each type is will help you figure out what you need to include in your policy.

1. One of the types of auto insurance is bodily injury liability. This is insurance that covers the driver of the other car involved in the accident. Your policy would pay for their injuries. This is especially important in case you are at fault in the accident and were to get sued.

2. Personal injury protection is similar to bodily injury liability except the difference is the people who are covered are the policy holder and anyone else in the vehicle.  It will pay for the medical bills in case any of them are injured or even die.

3. Another type of insurance that most people have included is property damage liability. This will cover any damage to another person’s vehicle in the event that the accident was your fault.

4. Collision also is one of the types of auto insurance. This is the most common type of insurance and it typically is the cheapest. It tends to be cheaper because you have to meet a deductible before your insurance will pay for the damages done to your vehicle. You can expect deductibles to be typically between $250 to $1000. The higher the deductible, the lower your insurance payment.

Although you have to pay some money if you are in an accident with collision, you are getting a good deal out of it because insurance companies charge so little money for it.

5. The coverage that pays for injuries and possibly other expenses when the other driver does not have auto insurance is called uninsured motorist. If the other person does have insurance but is under-insured, this policy may reimburse you for what their insurance does not cover. 

6. The final policy that is included in types of auto insurance is comprehensive. This type of policy will cover a myriad of instances that could happen to your vehicle. These include fire, collision, acts of God and theft. This is actually a very popular type of insurance because , after all, these unfortunate incidents do happen every so often. This type of auto insurance generally does not require you to pay a deductible.

Just because it is the law to have insurance does not mean you are required to have all of these coverages. But it would be appropriate in some cases to have all types because it would mean you are the most protected. However, you might only find it necessary to have what you think you will need and nothing more so you can save money.