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Auto Insurance

Car insurance protects you against monetary loss if you have an automobile accident. In exchange for premiums, which often cover semi-annual or annual periods, your insurance company will pay your expenses according to your policy. Before they pay these expenses, you may have to pay a deductible, which is the first portion of an expense. If you agree to pay larger deductibles, your premiums may be lower. You may also lower premium payments by purchasing other coverage from the same insurance company, such as home or life insurance. Your driving record may also affect your premium amount. Motorcycles, recreational vehicles, and commercial vehicles may have different premiums and coverage.

Car insurance policies include six kinds of coverage, each one carrying its own premiums and coverage limits. These are Bodily Injury Liability, Personal Injury Protection, Property Damage Liability, Collision, Comprehensive, and Uninsured/Underinsured Motorist Coverage. Check your state laws to determine what coverage they require.

Bodily Injury Liability covers injuries you have caused to others, and also covers related lawsuits. Personal Injury Protection covers injuries caused to yourself and your passengers, sometimes including lost wages, medical payments, and funeral costs. Property Damage Liability covers damage you cause to someone else’s property, including their car. Collision covers damage to your car. Comprehensive covers theft or non-auto-collision related damage, such as fire, weather-related damage, or vandalism. Uninsured/Underinsured Motorist Coverage covers damage or loss that the person at fault cannot cover.

Automobile insurance is required in all states, but in various forms and degrees. Possible penalties for failure to carry a state’s required auto insurance include jail, fines, and suspended license, not to mention potential loss of money or property. Certain coverage is mandatory, such as liability insurance. Other coverage, while maybe not mandatory, is prudent, such as collision, comprehensive, and uninsured motorist insurance. If you are driving a leased car, the leasing company may require comprehensive, collision, and even “gap” insurance. Your family members listed on your policy are also covered, even while legally driving someone else’s car.