Auto Insurance Coverage

Many car owners try to minimize their costs and buy as little auto insurance coverage as they can. Yet, there is certain amount of coverage that is required by state laws and that you cannot avoid. And since insurance payments represent a big portion of auto expenses, it is very important to get familiar with the different types of auto insurance coverage and get the right amount of coverage at the right price.

Types of Auto Insurance Coverage

Here are the types of insurance coverage your auto insurance policy may include:

Liability Auto Insurance

This is the primary (and usually mandatory) type of coverage addressed in automobile insurance policies. It provides protection when you are liable for property damage and personal injury.

Usually liability insurance coverage is quoted as a three-part number. This first number shows the maximum bodily injury liability per person. The second number shows the maximum bodily injury liability for all injuries in the accident. The third number shows the maximum property damage liability.

For example, a very common liability minimum required in many states is 25/50/10. This means that you are covered $25,000 in bodily injury per person injured in the accident, $50,000 in total bodily injury, and $10,000 in property damage.

Currently, the lowest state-mandated liability number is 10/20/5 and the highest one is 50/100/25.

Comprehensive Auto Insurance

The comprehensive coverage provides protection in case of non-collision damages. Such are theft, weather-related damages, vandalism, etc.

Collision Auto Insurance

Collision coverage is sometimes confused with liability but in contrast to liability, the collision coverage pays the bills only for the damages to your own vehicle.

Medical Payments Coverage (MedPay)

The medical coverage pays the medical expenses to you or the other passengers injured in an accident, without taking into account who is at fault.

Personal Injury Protection (PIP)

This coverage pays the medical, hospital and funeral expenses of you, your passengers, and pedestrians struck by you, without regard to fault.

Uninsured/Underinsured Motorist Coverage

Considering the fact that about 17% of the drivers don't have any insurance, this coverage comes in hand when the other party in the accident doesn't have sufficient liability insurance coverage or has no liability coverage at all.

Rental Auto Reimbursement

This will cover eventual car renting if your vehicle isn't drivable after an accident.

Gap Insurance Coverage

This type of auto insurance will cover the difference between what the automobile is actually worth (its "cash value") and what you owe on a loan or lease. This insurance is especially useful to have if you expect to get upside down on your auto loan.

The auto loan calculators and the information available on this site are intended to serve only as general guidance regarding auto loans. Since they do not take into account your individual circumstances, we cannot and do no guarantee their accuracy or suitability to a specific purpose. We highly recommend you to consider the appropriateness of any information to your objectives before acting on it, and encourage you to consult a qualified professional regarding you particular personal situation.

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