Since auto insurance is an industry that’s regulated on a state-by-state basis, every one of the states across the country have their own unique laws pertaining to how insurance is sold and what types of coverage are available to drivers. For the most part, however, there are two main types of auto insurance coverage that you can buy.
Vehicle liability insurance is the basic insurance coverage that covers injuries or damage to other people or property if you’re at fault for an accident. Anyone who drives a vehicle needs Liability insurance. In most situations, Liability insurance is required by law.* It is an option for those who don’t want to spend a lot of money on insurance and want to be protected from lawsuits and other financial liabilities in the event of an accident.
Essentially, with liability coverage your insurance company pays for any damages that result from a car accident that the insured has been deemed legally responsible for causing either by the courts or by law enforcement. This includes paying for medical injuries as well as property damage. Liability insurance also will pay for your legal defense costs if you are sued as a result of your involvement with the accident. However, it typically does not pay for damage to your own vehicle if it is involved in a collision with another vehicle or if it hits an object. Each state sets laws regarding how much Liability insurance its residents are required to have. This is known as your state’s minimum limits or minimum limit requirements.
The phrase “full coverage auto insurance” is a bit misleading. This is because there is no one type of “full coverage”. This type of coverage can encompass a combination of auto insurances that fits your needs and will pay for damages and expenses incurred in a wide range of situations. Typically, coverage can be customized to an extent, allowing for individuals to get just the right amount of protection they need at a price they can afford. They following types of coverage may apply as getting full coverage:
Comprehensive Coverage is meant to protect you in covered situations not related to a collision. These can include storms, natural disasters, hurricanes, tornados, vandalism, theft, falling objects, animal damage or a broken window. It is different for every company so it’s important to check your policy.**
Collision Coverage typically pays for damage to the insured person’s car if it results from an accident with another vehicle or object, or from rolling over. It’s different from liability coverage, which typically pays for damage to property belonging to another party involved in an accident you caused or bodily injury to another person. Typically, car owners with collision coverage are subjected to deductibles, which can either be relatively high or low based on the individual plan purchased.
Insurance companies sometimes offer additional services, subject to the laws and regulations in the states where they’re conducting business. Examples include road side assistance and special coverage like uninsured and underinsured motorist coverage. All consumers should ultimately do the research necessary in order to make an informed decision as to which degree of coverage is right for them and their families.