When buying an auto insurance policy, there are many different types of coverage that you could choose. Picking the right type of coverage for your situation is important so that you can minimize risk and protect your financial situation. Understanding the different types of coverage that are available is essential so that you can make an educated decision. Here are a few of the coverage options that you have to choose from.
Liability
Liability coverage is the most basic form of auto insurance and it is required by law in all 50 states. With this type of auto insurance coverage, you make sure that other drivers are taken care of financially if you cause a wreck. A liability policy will pay for the medical bills for another motorist who is injured in a wreck. The liability policy will also pay for the damage to the other vehicle into any personal property that is damaged in the wreck.
When choosing a liability auto insurance policy, the coverage will typically be quoted as a series of three numbers. For example, the policy might be quoted as 50/100/25. The first number represents how much the insurance company will pay per person when you have a wreck. In this case, the insurance company would pay $50,000 per person for medical bills. The second number of present the total amount of medical bills that the insurance company will pay per claim. In this example, the insurance company would pay up to $100,000 if multiple people were injured in the wreck. The last number, or $25,000 in this example, is what the insurance company would pay for personal property damage per wreck.
When buying liability coverage, you need to check to make sure that you at least get the minimum required for your state. Every state has different liability requirements and you'll at least need to meet those to be in compliance with the law.
Collision Coverage
Another type of coverage that you can buy for your vehicle is collision coverage. Collision coverage protects your own vehicle in the event that you cause a wreck. With collision coverage, the cheap full coverage auto insurance quotes pays to repair or replace the vehicle up to its current market value before the wreck. When getting collision coverage, it is important to understand that does not necessarily pay up to the amount that you owe on your auto loan. If the value of your vehicle has depreciated, you may owe more than what the car is worth. To cover the difference between what collision coverage will pay and what you owe, gap insurance can be purchased from your auto lender.
Comprehensive Coverage
Comprehensive coverage is another part of an auto insurance policy that you can buy. With this type of coverage, you get protection from many other types of damage to your vehicle. This can cover almost any type of damage that is not caused by hitting another car. For example, if your car is vandalized or stolen, this part of your policy will pay for the damage. The comprehensive deductible is typically smaller than what you would pay for a collision deductible.
SR22
While there is not a specific type of insurance referred to as SR22, many people call a specific category of policies SR22 because of the SR-22 form that must be filed showing that you have insurance coverage. If you have had your license suspended due to a court action, you may be required to get this type of insurance coverage when you start driving again. This is a special category of high risk insurance and it typically costs a little bit more than regular coverage. This is basically a form of liability insurance that you can buy, when you have had driving problems in the past. The insurance company will file the SR-22 form with your state to show that you have the proper type of insurance coverage in place.