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HomeAuto InsuranceAuto Insurance Guide

Auto Insurance Guide

What is auto insurance?

Auto insurance can be described as an agreement to pay all or part the costs of any accident, theft, or other damage to your vehicle. You pay an insurance premium in exchange for this coverage. Plan for freedom will assist you in understanding your options for home insurance, auto insurance or business insurance. Plan for freedom will help you comprehend your options and choose the right plan for you.

Auto insurance is a broad term that covers a variety of insurance protections for cars. According to the Insurance Information Institute, an auto insurance policy may include as many as six types of coverage.

  • Liability
  • Collision
  • Comprehensive
  • Uninsured Motorist
  • Underinsured Motorist
  • Personal Injury Protection

Auto liability insurance coverage

Liability insurance covers injuries and damages that occur in accidents caused by your negligence. Liability coverage does not include passengers and only covers the injuries of the driver.

Most accidents are shared by both drivers. This is called “comparative negligence” and it applies to most cases. However, if you are hit directly from behind you will still be considered partially responsible.

Auto collision insurance

This coverage covers damage to your vehicle caused by other vehicles. This coverage doesn’t include damage to other vehicles in an accident. A lender may require collision insurance for more expensive vehicles.

Collision insurance can be more expensive than liability insurance. It also often comes with a deductible, which is an amount you pay before your insurance kicks in. There are usually a few options for deductibles that insurance companies can offer. You will pay more to have your insurance cover you for any accident costs. However, a higher deductible means lower rates.

Comprehensive coverage

Comprehensive coverage can be described as “everything but” insurance. This insurance covers any damage to your vehicle that is not caused by an accident. This optional coverage protects your investment. Buyer trends showed that 77% of those who purchased liability insurance also bought comprehensive insurance in 2016. Many lenders require that you have comprehensive insurance for any vehicle with a lien against it in order to repay the loan. The cost of comprehensive insurance deductibles is usually $500 to $1,000, depending on the provider you choose and what you are signing up for.

Coverage for uninsured or underinsured motorists

In the event that the other driver has no insurance, your uninsured motorist coverage protects you. Your uninsured motorist coverage covers you for your damages. This coverage typically covers your passengers as well as bodily injuries.

Personal injury coverage

PIP, also known as Personal Injury Protection, pays additional hospital and medical expenses. This coverage is sometimes called no-fault in some states because it covers all drivers, regardless of who was at fault for the accident. Your passengers are also covered by PIP.

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