What Is Auto Insurance

While every auto insurance policy is different, depending on which coverage options you chose, you will find that there are three main types of coverage included by most policies. The first is property coverage. This is the coverage for your car. If your car is damaged or stolen, property coverage will pay your expenses. The second is liability coverage. This coverage will pay for any damage to other people or their property that you are responsible for as a driver. Finally, you may have medical coverage. If you are injured in car accident, this coverage will pay for your medical bills and other expenses, such as lost wages.

Under these three main categories, you will find that there are many different types of coverage. For instance, you may want to purchase uninsured/underinsured motorist coverage. This will cover property damage and medical bills caused by a driver who does not have adequate insurance.

All states require minimum coverage. You will need to check with your insurance agent to see what the minimum coverage is in your state. Liability coverage is required in all states. Some states require a minimum of the other types of coverage. Also, the state driving laws will indicate how much coverage you are required to have. Lenders often require even more coverage for cars that they have financed. The amount of coverage you purchase will depend on your needs, your lender's requirements, and your state's laws. Remember, driving without adequate insurance coverage is against the law.