Buying Auto Insurance: Types of Coverage

Different auto insurance companies offer many different types of coverage. Most states require drivers to purchase a minimum amount of certain types of coverage. Here are brief descriptions of typical types of auto insurance coverage offered:

1. Body injury Coverage : This coverage is mandatory in most states. Bodily injury coverage pays for medical bills, lost wages, treatment and/or funeral costs for anyone injured or killed by your car. Such coverage will also pay for "pain and suffering" damages when a third party successfully sues.

2. Property-Damage Liability Coverage: This coverage pays for the repair and replacement of vehicles and other property damaged when you or another authorized driver causes an accident.

3. Medical Payments Coverage: Usually optional, this coverage pays for medical expenses over and above amounts covered by personal insurance protection, no matter who caused the accident.

4. Personal Injury Protection: Pays medical expenses and some percentage of lost wages to you or anyone authorized to drive your car, no matter who caused the accident.

5. Comprehensive Coverage: Pays for damage to or loss of your car in the event of fire, theft. Again, your lender may require this coverage if your car is financed.

6. Rental Reimbursement: Reimburses up to a specified amount per day for car rental or transportation costs while your car is being repaired following an accident.

7. Protection from an Uninsured or Underinsured Motorist Coverage: Protects you, passengers and anyone authorized to drive your car against bodily injury caused by an uninsured, underinsured or hit-and-run driver.

8. Towing and Labor: It will covers up to a specified amount for labor charges when your car breaks down, whether or not there is an accident involved.

9. Auto Replacement: The full car replacement value apart from the depreciated value.

Generally your auto insurance will cover the above sides.