Every driver needs auto insurance. Auto insurance is your protection against the personal and property damages associated with auto accidents, theft, vandalism, or natural disasters. All 50 states require a minimum level of liability coverage for you to drive legally. Drivers with outstanding car loans will likely be required by their loan agency to purchase a specified amount of auto insurance.

It is important to remember that you will be responsible for the following:

  • A deductible (unless the other driver in a collision is at fault)

  • Situations that are excluded from your policy

  • Costs that go beyond the dollar amounts set in your policy

Liability coverage is the most basic form of car insurance. Liability includes coverage for bodily injury sustained by others in an accident for which you are held accountable. It also covers replacing and repairing the cars and property of others. If you are in an accident with an uninsured or underinsured driver , you may be covered by your liability insurance.

Collision coverage pays for the repair or replacement of your car if it is involved in a collision with another car or object. Your deductible will usually be $250 to $1000. The insurance company pays for your repair costs minus the deductible.

Comprehensive coverage reimburses you for damages caused by something other than a collision such as theft and vandalism and is also subject to your deductible. On average, deductibles for comprehensive coverage are $100 to $300 dollars, but you can choose a higher deductible to reduce your premium.

Personal Injury Protection (PIP) pays for the treatment of injuries to the driver and passengers of the policyholder’s car. PIP can cover medical bills, lost wages, and funeral costs.