If you drive a car or a pick-up truck, then you are required to have auto insurance in most states. This insurance provides you with financial compensation if you get into an auto accident. If you pay the insurance premium, then the insurance company will pay to have your car or truck repaired or replaced in the event of an accident. Your auto policy will have a term of either six months to one year. At the end of the term, your policy will have to be renewed.
An auto policy has six different kinds of coverage that are all priced separately and have separate deductibles. Thankfully, states do not require you to have all the types of coverage. The types of auto policy coverages include:
• Bodily injury liability – This covers any injuries to another person that are caused by you or anybody that has permission to drive your car.
• Personal injury protection – This provides medical payments and income replacement to you and to any passengers in your car for injuries that are the result of an accident.
• Property damage liability – This pays for damages you or someone driving your car with your permission causes to someone else’s property.
• Collision – This pays for damages resulting from a collision with another vehicle or object.
• Comprehensive vehicle coverage – This pays for damages or loss to a vehicle that isn’t the result of a collision such as theft or fire.
• Uninsured and underinsured motorist coverage – This pays you for damages or loss to the vehicle that is the result of you being hit by an uninsured or underinsured driver.
New Hampshire and Virginia are the only two states that do not require drivers to have auto insurance, although most drivers in these states choose to have an auto policy. Drivers who choose not to have insurance in these states have to show proof of financial responsibility, which involves purchasing a bond or making a cash deposit with the state. Not having an auto policy or proof of responsibility comes with stiff penalties. Make sure you get an auto policy to financially protect yourself and others in your vehicle.