Your auto insurance policy usually includes six coverages. Each coverage is priced separately, with the sum of each individual coverage being your total cost of your auto insurance premium.
1. Bodily Injury Liability
This liability coverage applies only to injuries to you, the designated driver or policyholder cause to someone else in an auto accident. Anyone in your family including yourself listed on the policy are covered when driving someone else’s car as long as they have their consent.
It is of importance to have enough liability insurance. You don't want to be involved in a serious accident and be caught without insurance. You may be sued for a large sum of money or in some states, even have your car impounded for driving without car insurance. This can lead to a lost of personal assets such as your car, personal valuables as well as your house. After reading this, you should probably be buying more than the state-required minimum to protect personal assets such as your home and savings.
2. Personal Injury Protection (PIP)
This injury protection coverage pays for the treatment of injuries to the driver and any passengers in the policyholder's car. In simple terms, PIP can be used to cover medical payments, lost job wages and the cost of replacing services normally performed by someone injured in a serious auto accident. In the event of a fatal accident, it may also cover any funeral costs in some insurance policy plans.
3. Property Damage Liability
The damage liability coverage pays for damage you (or someone driving the car with your permission) may cause to someone else's property. Usually, this only means damage to someone else’s car, but it also includes various outdoor objects such as telephone poles, buildings, fences or any other objects your vehicle hits.
This coverage pays for damage to your car resulting from a collision with another car, object or as a result of flipping over. It also covers damage caused by potholes on the street. Collision coverage is usually sold with a deductible of $300 to $1,000. The higher your deductible, the lower your premium will cost you. Even if you caused the accident, your collision coverage will reimburse you for the costs of fixing your car, subtracting the deductible. If the accident is not your fault, your auto insurance company will usually go after the insurance company of the person at fault. If they are successful, you'll also be reimbursed for the deductible.
This part of the coverage reimburses you for any loss due to theft or damage caused by something other than a collision with another car or object, such as fire, falling objects, explosion, earthquake, windstorm, hail, flood, vandalism, riot, or contact with animals such as birds or cows.
Comprehensive insurance is usually sold with a $100 to $300 deductible, though you may want to opt for a higher deductible as a way of lowering your premium. This usually is not needed, but in the rare cases of an unexpected earthquake or fire, can definitely keep you on your feet.
Comprehensive auto insurance will also reimburse you if your windshield is cracked or shattered. Some companies offer glass coverage with or without a deductible. Windshields can range as low as $99 to over $1000 in the higher end cars. Most of the time, the windshields are around $200-$500 dollars.
States do not require that you purchase collision or comprehensive coverage, but if you have a car loan, your lender may ask that you carry the comprehensive auto coverage until your loan is paid off.
6. Uninsured and Underinsured Motorist Coverage
This coverage will reimburse you, a member of your family, or a designated driver if one of you is hit by an uninsured or hit-and-run driver.
Underinsured motorist coverage comes into play when an at-fault driver has insufficient insurance to pay for your total loss. This coverage will also protect you if you are hit as a pedestrian. There are a number of uninsure drivers on the road today, so this is definitely useful if you have a decent car.