Auto Policy Basics

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The better you understand auto insurance policies, the better your insurance decisions will be. In what follows, we'll explain the basics of an auto insurance policy.

Liability & Medical Protection

The first component of your auto insurance coverage is liability and medical protection. There are three coverages that fall under this category:

  • Liability. As you get your cheap auto insurance rates, bear in mind that most states require certain levels of liability coverage to drive legally. Liability coverage falls into two subcategories: bodily injury liability and property damage liability. Bodily injury liability protects you from damages resulting from injuries or death caused by an accident that is your fault. Property damage liability protects you from bills when you damage another driver's property in an accident that is your fault.
  • Medical payments. Medical payments coverage will help you pay for necessary medical expenses after an accident. People looking for cheap auto insurance rates might consider eliminating this coverage because it is probably unnecessary if you have good health insurance.
  • Uninsured motorist. This coverage pays for your and your passengers' injuries in the event that you are hit by an uninsured or underinsured motorist.

Vehicle Protection

As you shop for cheap auto insurance rates, you will also need to include coverages in your policy that protect your vehicle. Such coverages include:

  • Collision. If you are involved in a covered accident, this option will help protect you from repair costs for your vehicle. Collision will help you pay to repair or replace your car after an accident.
  • Comprehensive. Any non-collision-related damage that happens to your car is usually protected by comprehensive coverage. This coverage protects you from damages such as weather-related events, animals, theft, vandalism, falling objects, fire, etc.

Additional Protection

You may wish to include other optional coverages in your policy when looking for cheap auto insurance rates. Optional additional coverages might include rental reimbursement, stereo/audio equipment protection, towing and labor costs coverage, etc. Still have questions that have not been answered? Check out the Cheap Auto Insurance Rates' frequently asked questions.