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Auto insurance companies use their knowledge of how insurance works to keep their expenses down. And you can do the same thing. If you understand the types of coverage in an auto insurance policy you'll be able to compare rate quotes and get the right protection at the right price.
Collision and comprehensive protection pays to repair or replace your car when it's in an accident or when it's off the road. Your out-of-pocket cost for an accident is your deductible. And you'll save money on your auto insurance, short and long-term, if you choose a deductible over the minimum.
Another type of auto insurance protection covers you if you're in an accident caused by a driver who's uninsured or underinsured. This coverage pays your bills if the other driver's insurance is insufficient to pay them. $50,000 is a recommended amount for this coverage.
To cover your injuries due to an accident, there's medical protection. The amount you have depends on your state's legal requirement and what health coverage you may already have. If the auto insurance coverage duplicates your health plan and state law allows it, you can eliminate the coverage. Although you may always want to include at least some, as it also will pay for your passengers' medical expenses following an accident.
If you're at fault in an accident, liability protection will pay the other driver's expenses as well as your legal costs, if he sues you. Bodily liability pays for the driver's injuries that you cause and property liability covers his car and any property damaged. If you want adequate protection from your auto insurance, you should ignore the state minimums for liability. To get enough protection you need at least $50,000 for property and $100,000 per person bodily liability.
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