What Is Auto Insurance?
In the United States, most of the states require anyone who drivers or owns a vehicle to have at least liability insurance. Those insured adds up to about 160,000,000 people, with only around 16% uninsured.
Auto insurance protects drivers and owners from devastating financial loss due to an accident involving a motor vehicle. A driver who is licensed is required in most states to have liability coverage. There are two main types - property damage and bodily injury or death.
Property Damage Coverage
Property damage insurance coverage covers damage to someone else's car, real estate, or personal property due to a motor vehicle accident.
Bodily Injury/Death Coverage
This coverage takes care of any liability that you are responsible for due to injuries to third parties while you are driving a vehicle. Uninsured Motorist Bodily Injury is another type that will cover your own injuries if the at-fault driver does not have insurance.
Other Types of Coverage
- Collision insurance will cover damage to your own vehicle.
- Comprehensive coverage covers the insured's car from non-accident damage, as well as from theft.
- Personal Injury insurance coverage takes care of medical and funeral expenses for the one insured, as well as any passengers or third parties involved.
When determining what amount and type of insurance that you need to consider, you want to check your state laws. Your state laws will have a minimum limit that you will need to comply with. Auto insurance may seem too expensive, but it can be even more expensive in the long run if you do need it.