| Auto insurance, as the term suggests, is | | | | cost of medical expenses for bodily injury |
| insurance that you can purchase for your | | | | sustained in an accident beyond any expenses |
| vehicle (cars, trucks, SUVs, motorcycles, | | | | that may be covered by PIP. |
| etc.). It provides protection against losses | | | | |
| incurred as a result of vehicle accidents. | | | | Legal liability claims against the driver or |
| While the product seems simple, there are | | | | owner of the vehicle following the vehicle |
| many different types of auto insurance | | | | causing damage or injury to a third party. |
| policies available for purchase. Depending on | | | | |
| the policy that you choose, your coverage | | | | While 'Liability insurance' covers only legal |
| levels and types will vary. Broadly speaking, | | | | liability, 'comprehensive insurance' covers |
| these are the types of auto insurance | | | | PIP, MP, as well as legal liability. In the |
| programs on the market today: | | | | United States, liability insurance covers |
| | | | claims against the policyholder and any other |
| Coverage: | | | | operator of the insured's vehicle. If, |
| | | | however, any other operators live at the same |
| 'Comprehensive coverage' (Comp) - This kind | | | | address, they must specifically be covered on |
| of insurance insures your vehicle against the | | | | the policy. For rented vehicles, most rental |
| cost of purchasing a new vehicle if it is | | | | car companies offer insurance to cover damage |
| stolen or destroyed in a fire. | | | | to the rental vehicle. |
| | | | |
| 'Collision coverage' (Coll) - This kind of | | | | While comprehensive insurance covers most |
| insurance insures your vehicle against the | | | | aspects of damage which can affect the car |
| cost of repairing the vehicle following an | | | | itself or the driver, there is one risk |
| accident or the cost of purchasing a new | | | | associated with buying a new car is not |
| vehicle if it is damaged in an accident | | | | covered even by comprehensive insurance - |
| beyond economic repair. | | | | once the car is bought, there is a sharp |
| | | | decline in its value. During this period |
| Protection: | | | | (immediately after a car is bought), in which |
| | | | the remaining car payments exceed the value |
| Personal Injury Protection (PIP) - This | | | | of the vehicle and thus the compensation the |
| insures against the cost of medical expenses | | | | insurer will pay for a 'totaled' (destroyed, |
| and lost wages related to the use, ownership | | | | or written-off) vehicle, customers may |
| or maintenance of a motor vehicle. This | | | | consider purchasing 'GAP insurance'. GAP |
| insurance is mandatory in some U.S. states. | | | | insurance was established in the early 1980's |
| | | | to provide protection to consumers based on |
| Medical Payments (MP) - insures against the | | | | buying and market trends. |