Kinds of Auto Insurance Coverage

There could be many different types of auto insurance coverage, most of which may be governed by different rules within the home state as well as current agreements between auto insurance firms. Today, almost every car owner could be required to have some sort of minimum auto insurance coverage, which may be determined by the laws of his or her home state. In most states, driving without this minimum auto insurance coverage could be equal to committing a crime and may have a heavy penalty in terms of large fines and suspension of a driver’s license and vehicle registration. In some cases, you might even be looking at jail time.

To avoid all this, it may be mandatory to obtain at the very least, minimal full coverage auto insurance. How might you determine the type of auto insurance coverage you may need? You may want to take a look at the different types of coverage that could be available on the market today.

• Property damage (PD) and Bodily Injury (BI)

In some states, PD and BI could be mandatory forms of auto insurance coverage. Such states may tend to have a tort rule that could suggest that if you, as a driver, may be responsible for a serious accident that might have caused either bodily injury or property damage, you and the insurance firm under which you may have coverage may be liable to help pay for all injuries and damage caused.

In such cases, the insurance firm may help pay up to the pre-determined limit, and you might have to foot the rest of the bill, if it might be above the minimum limit determined. This could be why you might need to look for full coverage auto insurance to save yourself the financial headache and possible financial ruin.

• OTC

If you could be looking for full coverage auto insurance, you might also want to obtain OTC, otherwise known as “Other than Coverage.” This type of coverage may be pretty much comprehensive and could help cover events such as theft, fire, vandalism and other catastrophes such as floods and earthquakes. OTC may be one of the most expensive auto insurance coverage policies.

• Collision Coverage

Collision coverage could be an integral requirement of financial institutions from whom you may have received your car loan. With this type of auto insurance, you may be safe in the event that your car gets hit or hits another vehicle. Collision coverage may also tend to have high premiums.

• UM/UIM

The Uninsured Motorist or Underinsured Motorist coverage may be used to help provide protection for you when the party that did the damage might have had no insurance, or the auto insurance coverage may be too low to offset the damages caused to your vehicle. In such instances, your own insurance firm may help pay your medical bills, which may later receive reimbursement from the other party.

For more information on inexpensive car insurance, please view the article Inexpensive Car Insurance.