Car insurance is one of those things that everyone has to have to be able to operate a motor vehicle. Though this is the case, the reality is that most people do not have a very deep level of knowledge when it comes to understanding auto insurance and the way that it works. This has some unintended consequences and chief among them is that many people end up either paying too much for their insurance, or they do not adequately protect themself and have a policy that is leaving them underinsured for their situation. Vehicle owners are always interested in finding cheap auto insurance, but it is important to have sufficient coverage.
One of the reasons that the topic of auto insurance is a complicated and confusing one is that there are multiple types of insurance out there and they have different attributes and coverage levels. These different types of insurance serve a different range of purposes. With this in mind, it is important to get a good idea of the available different types of insurance.
A Breakdown of the Different Insurance Types on the Market
Basic Liability – This is the most basic form of cheap auto insurance that many people are familiar with. Liability does not cover any expenses for the policyholder, and instead covers the other party when the policyholder is at fault in an accident. It covers expenses of persons in the other car involved in an accident but does not cover the at-fault driver or the expenses of anyone in their vehicle.
Bodily Injury Liability – This form of insurance is commonly known as BIL. Like liability insurance, the coverage in these policies does not pay for the expenses of the policyholder. It covers the expenses of others that are injured when the policyholder was at fault.
Property Damage Liability – Property damage liability insurance again is a policy type that does not cover expenses for the policyholder. It pays for property damage to the other vehicle that was involved when the policyholder was the at-fault party.
Personal Injury – This insurance type is often known as PIP and it the medical expenses of the policyholder and any passengers in the case of an accident.
Uninsured Motorist – An insurance type that provides coverage to the policyholder when they are involved in an accident with a motorist that is uninsured or underinsured.
Collision – A policy type that covers the policyholder’s property damage to their vehicle in the case of an accident.
Comprehensive – A policy that provides the policyholder with coverage in the case that the vehicle is damaged outside of the scope of an accident or is stolen.
For vehicles of high-value, it is often the best policy to have collision and comprehensive insurance policies.
It Can Be Problematic to Carry Too Little Insurance
Everyone wants to find cheap auto insurance, but it is also important to have enough coverage to take care of one’s vehicle situation. Failure to have enough insurance coverage runs counterproductive to the point of having insurance, to begin with.
How Much Insurance Is Needed In Each Particular Situation?
It is important to get a coverage amount that lines up with one’s situation. It is also important to note that many insurance companies will attempt to get customers to purchase more than they need, but many individuals will also fail to purchase enough if they have it in their mind to only get the legal bare minimum. The best thing to do is to shop around and check out the different insurance options that are out there. This is the best way to find a coverage plan that will be sufficient for one’s own needs.