The Different Types of Auto Insurance

Purchasing auto insurance is a complex process and knowledge of the different types of auto insurance is absolutely essential if you want to buy the right auto insurance policy at the right price. While state mandates and regulatory requirements play a major role in determining the different types of auto insurance offered in each state, consumers need to be aware of some of the many different types of auto insurance they can purchase.

Liability insurance is the most basic requirement in each state and it helps hedge against expenses arising with an accident, typically if the other person's vehicle is damaged. While liability coverage is the basic type of the different types of auto insurance, if your car or vehicle is purchased through a loan, your lender may require full auto insurance coverage, as opposed to just basic liability insurance.

Property damage insurance, on the other hand, covers for repairs or damages to the other party's property.

On a like note, personal injury protection pays for a pre-determined proportion of medical bills, hospitalization, or medical treatment expenses. Certain policies also cover wages lost resulting accident or death.

Collision coverage offers much peace of mind the driver and protects the owner-driver's vehicle arising from collision with another vehicle or object.

Uninsured motorist coverage. If your vehicle were damaged by an uninsured driver, this coverage kicks and protects against bodily injury, normally to the insured driver (and accompanying passengers) at the other end.

Under-insured motorist coverage. It is similar to uninsured motorist coverage, except that there is a requirement that the party carries insurance but with limits much lower than those on underinsured motorist coverage.