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Auto Insurance Converage Definitions

In order to decide what type of auto insurance policy is best for you, you'll want to get a auto insurance quote from more than one auto insurance agent. Multiple quotes will allow you to effectively compare auto insurance rates to find a rate you want to pay for the amount of coverage that you need. If you are looking for a auto insurance quote for the first time, understanding the different terms used to explain auto insurance may be a challenge. It's important to know what type of coverage best suits your needs before settling on a auto insurance quote. Understanding your insurance policy will save you money and frustration in the long run.

Simple Coverage Definition Guide

  • Bodily Injury Liability- If you are responsible of an accident resulting in the injury or death of another person, bodily injury liability will cover any claims made for bodily injury made by the injured party. It can help pay for things like medical bills, loss of income or pain and suffering. It also covers legal defense if the injured party should file a lawsuit. This type of coverage protects only people, not damage to the vehicle. Bodily injury liability coverage is mandatory in most states and is usually included in the rate quote of a auto insurance quote.
  • Property Damage Liability- In the event of an accident that damages someone's property, be it their auto, fence, house or any other type of property, property damage liability will help cover any expenses. This type of coverage does not cover damages to your auto.
  • Comprehensive Coverage- Covers your vehicle and other vehicles you may be driving for losses resulting from an accident other than a collision. This insurance coverage helps pay for the damage of your auto if it is stolen; or damaged by fire, flood or animals. If you are concerned about an expensive premium, when looking for a auto insurance quote, select options that allow you to choose as high a deductible as you would like to pay out of pocket. Comprehensive coverage is not required by a state, but if you have a loan or a lease then the lien holder will require it.
  • Collision Coverage- Pays to fix your vehicle if your auto hits or is hit by another vehicle or other object. Collision coverage is limited to the cash value of your auto, so it may not be interested in adding this insurance coverage to your policy if you have an older vehicle. However, if there is a loan or lease on your vehicle, the lien holder will require it.
  • Uninsured or Underinsured Motorist Coverage- This type of auto insurance covers property damage to the insured and the negligent operator possesses insurance, but the limits of liability carried by the negligent driver are not sufficient to cover the damages. This coverage is not required by most states, but is recommended for drivers who have recently purchased a new auto.

You can have these and other types of insurance coverage included in your auto insurance quote rate. Depending on which state you live in, you can choose to add or drop certain types of coverage that is not required.

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