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Auto Insurance


There are two types of automobile insurance available: Bodily Injury Liability and Comprehensive Coverage.

Bodily Injury Liability insurance for your automobile covers the cost of damages and/or injuries in the event that you cause an accident. Most states have laws requiring bodily injury liability insurance coverage, so it is important that you have it to not only protect your finances but to ensure that you abide by state law. The good news is that bodily injury liability insurance is the least expensive type of insurance. The downside is that if you have a liability-only policy your own vehicle will not be repaired if you cause a car accident. The other person will have his/her car repaired or replaced, but you will be left to your own devices to get your car back in order. This is why liability-only policies are the most affordable type of insurance. Liability-only policies can be a good fit for people with older cars with low resale value. That is, it makes no sense to have more than liability coverage on a rusted-out beater car.

For people who have a newer car or who are paying off a car loan, there is comprehensive coverage. As its name suggests, comprehensive insurance provides more wide-ranging coverage than bodily injury liability insurance. Comprehensive coverage protects you against property damage and personal injury costs just like liability insurance, but it also typically contains a Collision Coverage component which pays for you to have your own vehicle repaired if you cause a car accident. Whether sold with or without collision coverage, comprehensive insurance for autos covers damage from theft, flood, fire, hurricane, hail and vandalism. The exact conditions of coverage will vary from policy to policy so be sure to read your own policy document carefully to understand what types of incidents will be covered.

Comprehensive and Collision insurances generally require that a deductible be paid in the event of a claim. Bodily injury liability insurance does not require a deductible be paid, however. A deductible is the amount of money that you must pay before an insurance company will disburse (pay out) any monies. The deductible is there to keep you honest and to lessen the likelihood that people will file frivolous claims. Deductibles also encourage people to be more careful when driving. If you know that you will have out-of-pocket expenses in the event of an accident, you will do your best to avoid being involved in one. The size of your deductible amount affects how costly your insurance is. The higher your deductible, the less you will have to pay for your policy.