The best insurance auto insurance coverage for an adult driver depends upon his or her individual needs. The policy provisions will reflect at least the minimum level of liability protection required under the laws of the jurisdiction where the car is registered. A driver may also want to add optional provisions, such as collision and comprehensive protection and uninsured/underinsured motorist coverage to the policy.
Minimum Levels of Auto Insurance Coverage
In most parts of the United States, drivers must have at least a minimum level of third party liability auto insurance coverage in place. This type of insurance pays for claims made by the occupants of the other car involved in an accident and covers claims for personal injuries and property damage.
Bodily injury liability insurance pays for medical bills and rehabilitation expenses incurred by accident victims. In some states, injured people also have the right to request compensation for economic loss, as well as pain and suffering.
Property damage liability insurance coverage is used to pay for repairs to the other driver’s vehicle. It also pays for the cost to repair or replace public property, such as buildings, sheds, fences, guard rails and sign posts. The property damage part of the auto insurance policy doesn’t compensate accident victims for the cost to repair or replace any personal items damaged or destroyed in the accident.
Collision and Comprehensive Coverage
Collision and comprehensive auto insurance are both forms of physical damage coverage. They pay for the cost of repairs to the policyholder’s vehicle, up to the policy limit he or she has chosen, less the amount of the policy deductible. If the car is totaled in the accident, the insurer pays out based on its cash value.
The collision part of the policy pays out when the damage to the vehicle is caused by striking another car or an object. Comprehensive insurance pays out when the damage is caused by other losses, including hail, wind, flooding, fire, theft and vandalism.
Uninsured/Underinsured Motorist Protection
Uninsured motorist protection pays for damages caused by a driver who doesn’t have insurance coverage in place. It also pays out when the accident was a hit and run and the person responsible cannot be identified.
Underinsured motorist insurance coverage is used to top up the at-fault driver’s coverage when it is not high enough to pay for the damages he or she caused in an accident. The at-fault driver’s insurance company will pay out on the claim up to the policy limit and the underinsured motorist coverage is used to make up the difference to cover the damages caused up to its policy limit.
Finding the Right Auto Insurance Coverage
Drivers who are looking for the right auto insurance coverage for their needs should be prepared to shop around before making a decision. Rates and coverage terms will vary from company to company, and taking the time to consider what different ones have to offer can help a driver find the best option for his or her needs.