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Auto Insurance — Protecting your car and yourself

Auto insurance is a type of insurance that every driver is required to have in most states. There are hundreds of auto insurers to choose from, all advertising the lowest rates available. Choosing the right option can prove difficult. Shopping only for low premium won’t always result in the wisest choice.

All auto insurance policies have several types of coverage included in the policy. Some of the coverages and minimum levels of coverage are dictated by the laws of the state. Others are optional but could be very valuable.

• Bodily injury liability is protection that covers your liability if the driver of your vehicle injures someone else. Most experts recommend at least $100/300 liability coverage. $100,000 each person, $300,000 for each accident.
• Personal injury protection covers medical treatment for injuries incurred by you and any passengers in your car.
• Property damage liability pays for damages that you or your car inflict on another car or other property. A lot of states have a minimum of $10,000, but that’s not going to go far in replacing a luxury car or SUV. $50,000 or more of this coverage would be a safer option.
• Collision insurance pays for damages to your car when it’s involved in an accident. Here’s an area where you can reduce your premiums by raising the deductible to $500 or more. If you have an older model car, it might make sense to drop this coverage altogether.
• Comprehensive insurance is blanket type coverage which pays for damages to your car from damages that aren’t the result of an accident. Hail, vandalism, flood, etc. Similar to collision, it may make sense to raise the deductible or eliminate it completely for an older car.
• Uninsured/Underinsured motorist insurance pays for damages when you’re involved in an accident with a motorist carrying no insurance. In many states the coverage of this insurance are automatically set to the same as the coverage for bodily injury liability.