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What is covered by a basic auto policy?

By Compuquotes Team on October 16th, 2009

Auto Insurance

Consumers interested in finding the cheapest car insurance should compare auto insurance companies online to make sure they are getting the best rates for complete coverage.

Auto insurance is required in order to legally drive a car in most states. It protects your finances by paying to repair your car if you are in an accident and covering your liability if someone is injured. Most states establish minimum coverage requirements, but drivers may want to consider carrying additional car insurance to ensure they are completely protected.

Rates for auto insurance vary widely from company to company, so comparing auto insurance quotes makes sense. Of course, the cheapest car insurance is not always the best, so consumers should look at the auto insurance rates for each of the different types of coverage.

� Bodily Injury Liability covers injuries that the policyholder causes to another person. Drivers listed on the policy are also covered when driving someone else's car. This coverage protects drivers if case they are involved in a serious accident and sued.

� Medical Payments or Personal Injury Protection (PIP) pays for medical treatment for the driver and passengers in the policyholder's car. It can also cover lost wages or the cost of replacing services provided by someone who has been injured and even funeral costs if necessary.

� Property Damage Liability pays for damage to someone else's car if the policyholder or another driver of the covered car causes an accident. Payments can also cover damage to lamp posts, fences, telephone poles, or buildings hit by the car.

� Collision Insurance pays for damage to the policyholder's car from an accident and even covers damage caused by potholes. Collision coverage is generally sold with a deductible of $250 to $1,000--the higher your deductible, the lower your premium. Even if you are at fault for the accident, your collision insurer reimburses you for the costs of repairing your car, minus the deductible. If you're not at fault, your insurance company may try to recover the cost from the other driver's insurance company and reimburse you for the deductible.

� Comprehensive Insurance pays for damage or loss of your car due to something other than a collision, such as a fire, theft, storms, vandalism, or contact with an animal such as a deer. Comprehensive insurance is usually sold with a $100 to $300 deductible, but a higher deductible can lower your premium. Comprehensive insurance companies also reimburse you if your windshield is cracked or shattered. Some companies offer glass coverage with or without a deductible.

Not all states require collision or comprehensive coverage, but if you have a car loan, your lender may insist that you carry it until your loan is paid off.

� Uninsured and Under-insured Motorist Coverage reimburses you, a member of your family, or a designated driver if one of you is hit by an uninsured or hit-and-run driver. Under-insured motorist coverage comes into play when an at-fault driver has insufficient insurance to pay for your total loss. This coverage also protects you if you are hit as a pedestrian.

Consumers interested in keeping their insurance premiums low can compare auto insurance online, making sure to compare the same coverage level as they search for the best deal on car insurance.

See average annual insurance rates for more than 2,000 vehicles

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