Auto insurance is a complicated business. Most states legally mandate that drivers carry a certain level of coverage, but what that coverage is and why can seem arbitrary and unclear, leading to frustration, unnecessary expense and/or uneven coverage, which can cause problems for any involved in an insurance-related incident. This is why, for both drivers and insurers, clear understanding of the laws and what a given level of auto insurance covers is important.
The most basic level of auto insurance is that of liability. What this really means is that the insurance exists to protect drivers from as many of the financial consequences of their own and others’ errors as possible. Liability coverage is a term that is bandied about however, without a complete understanding of what a given policy may entail.
Depending on the area, liability insurance may appear as a single entity or as two different lines and minimum amounts of coverage on a policy. Regardless of the specifics, there are two halves to it. Property is the heading under which all material items – cars, mailboxes, houses, — that a driver or unattended vehicle damages are covered under.
The second area covered by basic liability is that of bodily injury. This type of auto insurance is usually used to cover the medical expenses of the injured party, though depending on the level, amount and type of coverage the policyholder has, it may involve a range of things. The goal of the insurance is that the driver does not have to cover someone else’s expenses out of their own pocket.
It should be remembered that while the above types are usually the minimum required by a state, they do not cover the driver/owner of the car or the vehicle itself against injuries. They are only designed to protect injured parties and the insured’s finances in times of accident. To protect yourself, your vehicle and other drivers of the same, there are personal injury and property policies, as well as uninsured motorist – which helps to mitigate your expenses if the at-fault driver is not insured. Knowing what kind and how much coverage is needed is tricky and calls for a good agent.