Auto Insurance Policy - Coverage Types and Limits

The Liability or Required Coverage

Liability auto insurance coverage is mandated by law for auto insurance consumers in all states. In an auto accident that you are responsible for, this coverage protects you against claims made by those who were hurt. In fact, this coverage can also pay for the property you've damaged. However, should you be accountable for a major accident, this type of coverage will not likely be able to cover all your expenses since the law only requires a minimum coverage limit. Keep in mind though that each state may not have the same minimum requirement for liability coverage.

Types of Liability Coverage and their Recommended Limits:

• Property Damage Liability
  Property damage liability covers the costs of the damage you've incurred to the other person's property during an accident. This can be an auto you've damaged or a wall you've cracked due to an auto accident that you caused. The recommended limit for this coverage is $100,000/accident.

• Bodily Injury Liability
  This type of liability insurance covers the costs of medical bills, pain and suffering, rehabilitation and legal costs of the person/s you've harmed because of an accident. In addition, funeral expenses can also be covered. The recommended limit for this coverage is $100,000/person and $300,000/accident.
  
  

The Recommended Coverage

Compared to the liability or required coverage, the recommended coverage is not required by the laws of the state. It is actually offered to auto insurance customers who wish to acquire additional protection. This auto insurance policy coverage offers more useful options to consumers. For example, if you have a new auto, you could consider providing it with more than just a basic coverage policy. Or more importantly, if you get into a serious accident, the recommended coverage provides you with better protection.

Types of Recommended Coverage:

Collision Coverage
Collision covers the expenses of auto repairs if your auto was damaged. It can be because your auto hit an object such as another auto or stationary objects like lamp posts and street signs. The recommended limit for this is usually the highest deductible you can afford.

Comprehensive Coverage

Comprehensive coverage can pay for your expenses that developed due to acts of crime such as theft and vandalism, as well as acts of nature just like storms, floods and other events that may occur. The recommended limit is the same as the collision coverage.

Underinsured Motorist Coverage

Underinsured Motorist coverage can cover your medical and repair expenses should you have a larger coverage limit compared to the other person's liability coverage limit. Just like the bodily injury liability, the recommended limit is $100,000/person and $300,000/accident.

Uninsured Motorist Coverage

If hit by a driver with no insurance or a hit-and-run driver, this auto insurance policy coverage pays for your expenses that arose from injuries and repairs. Also, it assures you that you will get the proper reimbursement that you are entitled to from the uninsured driver. The recommended limit is the same as the underinsured motorist coverage.