Basic auto insurance coverage

When you get basic auto insurance policy there are different types of coverage that are typically included in it. And knowing what types of coverage and what amounts are included in your policy is one firm step towards getting cheap car insurance that you'll be able to save your money with.

So when speaking of basic auto insurance policy there are likely to be six types of coverage included in it:

1. Bodily Injury Liability

This type of insurance coverage protects individuals harmed by you or your family member listed in the policy while being behind the insured vehicle's wheel. This type of coverage also takes force when you're driving another vehicle with the vehicle owner's permission.

When speaking of this type of coverage, the main rule is having more of it than your state's minimum requirement. Why is that? Because when you have a serious car accident (doesn't matter at-fault or not) and someone is seriously injured due to it, then you may face quite hefty medical bills (or funeral costs, in case the accident was tragic) that should be paid by your insurance company. And in case you don't have enough bodily injury liability coverage, some of your major assets could be at risk, for example your house. Who wants that to happen, right?

2. Medical Payments or Personal Injury Protection (PIP)

This coverage type takes force when you or your passengers are injured while being in the insured vehicle. PIP coverage usually covers your medical costs, lost salary during the recovery period lost due to the accident, and with some companies also funeral costs if required.

3. Property Damage Liability

As you may guess from the name, this type of auto insurance coverage pays for damage delivered to someone's property (including public) that you or someone else has caused while driving the insured vehicle. This means that it will pay for other cars damaged in the accident, private property and public property infrastructure such as signs, poles, buildings, fences, etc.

4. Collision

This coverage type is the exact opposite of property damage liability coverage as it pays for the damage the insured vehicle takes from collision with another car or infrastructure elements. Collision coverage has a deductible ranging between $250 and $1000, which is the amount of money to be paid upfront in case you're at fault in the accident. When you're not at fault the insurance company is likely to pay you the deductible as well as to cover your repair costs.

5. Comprehensive

Comprehensive and collision types of coverage are often bundled into a single coverage type as they both deal with damages to the insured vehicle. However, when speaking about comprehensive coverage, the damage to be paid for in this case results from factors other than the traffic-related, for example fire, storms, riots, wild animals, etc. This type of coverage is also likely to pay for any damage to your vehicle's windshield.

6. Uninsured and Underinsured Motorist Coverage

This type of coverage pays in case you're involved in an accident with a hit-and-run driver, or the other driver doesn't have sufficient coverage to pay for your damages.