Auto insurance is an important part of owning a car. It helps protect you from financial losses in the event of an accident or other incident. There are two main types of auto insurance policies: exclusive liability and full coverage. Exclusive liability policies only provide coverage for bodily injury and property damage, while full coverage includes comprehensive and collision insurance, in addition to the minimum state coverage.
Most states have statutory minimums on how much liability coverage you should have, but it's often a good idea to carry more than you need to reduce the chances of having to pay out of pocket later on. Collision coverage helps cover the costs of repairing your vehicle regardless of fault. This type of insurance does not cover if you hit an animal or if your car breaks down due to age or unreliability. Comprehensive coverage is typically sold along with collision coverage, and they are often thought of as two sides of the same coin.
The most common types of auto insurance coverage include liability, collision, personal injury protection, uninsured or underinsured motorists, comprehensive and medical. When you're looking for a new policy or reviewing the one you already have, it's important to understand how each one can help protect you by comparing quotes. You could face thousands of dollars (or more) in out-of-pocket costs if you're involved in an accident where you're at fault and have only minimal coverage. Anti-theft and tracking devices on cars can make this coverage a little more affordable, but taking out this type of insurance can be expensive and may not be necessary, especially if the car is easily replaceable.
If you're adding a teen driver to your car insurance policy, it's a good idea to consider increasing the limits of your coverage. In other words, a liability insurance policy will only cover damage or injuries to other people's property after the accidents you cause, while a full-coverage policy may cover repairs and medical expenses for your own vehicle, depending on the particular types of insurance you include. Towing and labor coverage, also known as roadside assistance, can help you cover your expenses if you need a trailer, run out of gas, run out of fuel, or if you have a flat tire. This is the kind of situation where protecting uninsured or underinsured motorists would help with expenses.
Comprehensive car insurance covers losses caused by theft, vandalism, or extreme weather events. It also covers damage caused when you hit another car, person, or immovable object (like those pesky ornamental rocks that Cousin Todd has at the end of his driveway). Car insurance is one of the most common types of insurance out there, but there are many confusing terms that go along with it. You should also consider buying it if you don't have overlapping types of coverage, such as collision insurance or PIP.
In addition to the types of insurance required by law, it is recommended that you take out as much insurance coverage as you can comfortably afford. These are the most common types of car insurance, although many insurance companies also sell other types of coverage such as supplemental insurance and rental reimbursement.