Insurance laws vary from state to state, but all states require
some type of insurance or proof of financial responsibility. Even though it may seem like an "extra" cost, car insurance protects
you, your family and your vehicle if you’re ever in an accident or if your vehicle is damaged.
Several factors, including your driving record and insurance
history, affect the type of insurance policy available to you. If you have a clean driving record and have been insured in
the past, you’ll most likely qualify for standard auto insurance.
Generally, if you haven’t had insurance, or have a less-than-perfect
driving record, you can still qualify for auto insurance. This type of insurance is known as specialty insurance.
Your auto policy may include six coverages, each priced
separately:
1. Bodily Injury Liability applies to injuries that you,
the designated driver or policyholder, cause to someone else. It’s very important to have enough liability insurance
because if you’re involved in a serious accident, you may be sued for a large sum of money. Definitely consider buying
more than the state-required minimum to protect assets, such as your home and savings.
2. Medical Payments or Personal Injury Protection (PIP)
pays for the treatment of injuries to the driver and passengers of the policyholder’s car. At its broadest, PIP can
cover medical payments, lost wages and the cost of replacing services normally performed by someone injured in an auto accident.
3. Property Damage Liability pays for damage you (or
someone driving the car with your permission) may cause to someone else’s property.
4. Collision pays for damage to your car resulting from
a collision with another car or object.
5. Comprehensive reimburses you for loss due to theft
or damage caused by something other than a collision with another car or object.
6. Uninsured and Underinsured Motorist reimburses you
if you’re hit by an uninsured or underinsured driver, or a hit-and-run driver.
