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What Does Basic Car Insurance Cover?

  • Auto Insurance
  • Xavier Sabastian
  • 4 minutes

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While different states have varied vehicle insurance laws, most basic car policies include six types of coverage. Here’s everything you need to know about each of them.

basic car insurance

Getting basic car insurance coverage is simple, but first, you must understand what basic coverage entails. You most likely want a cheap auto insurance policy. You also just want it to be over as soon as possible. The typical attitude is “take my money, give me proof of insurance, and leave me alone when it comes to vehicle insurance.”

Not everyone is familiar with all of the car insurance jargon.

In reality, many people are probably unaware of the type of coverage on their vehicle. Basic auto insurance coverage is frequently whatever the state requires you to purchase. Depending on where you live, it will help if you plan to purchase a policy that includes personal liability coverage, PIP coverage, and uninsured motorist coverage.

Personal Liability Protection

Personal liability coverage is the cornerstone of all vehicle insurance policies. That safeguards you if you injure someone or damage their automobile or property in a car accident. Each state determines the minimum coverage required. However, many insurance agents believe that the state’s minimum liability levels are insufficient.

The preferred liability limits are 100000/300000/100000.

What does car insurance cover?

The coverage you choose is the maximum amount that can be paid out. Many consumers are surprised to learn that liability coverage does not apply to them. The primary purpose of liability coverage is to protect the insured from potentially costly litigation resulting from an auto accident. An added benefit would be also safeguarding other drivers from the car and health-related costs.

A typical personal liability vehicle insurance policy includes three coverage limitations. They are frequently listed as three numbers separated by slashes, with no more information detailing the coverage.

Limitations on Liability

Injury to the body:

The first limit specified in the example is $100,000 in liability per person. The dollar amount represents the most your insurance will payout to a single person injured in an accident caused by you.

Bodily Injury Liability Limit Per Accident:

$300,000 is the second limit in the example. This is the most money a provider can pay out per accident. More than $100,000 in damages would have to be paid out if multiple people were hurt.

Multiple major injuries could quickly exhaust a modest limit.

This is a significant reason why state minimum vehicle insurance limits are low.

Property Damage Liability:

The third $100,000 limit is for property damage. It covers protection for any inanimate object owned by someone other than you.

Driving into a house, hitting and damaging a car, or breaking a guardrail are all instances of accidents that might cause property damage. As you can expect, the expense of property damage can quickly pile up. It is critical to have adequate coverage to give adequate protection.

Uninsured or underinsured driver

In some states, uninsured motorist insurance is mandatory. Depending on where you live, a minimum amount will be necessary. Many insurance agents will advise you to match your liability and uninsured motorist limits. Uninsured motorist coverage is available if an uninsured driver destroys your car or injures someone in your vehicle.

Underinsured motorist coverage kicks in if your damages exceed the other driver’s limits and you have more significant limits. Like personal liability, the maximum allowed for a single individual is $100,000, and the maximum allowed for an accident is $300,000. Uninsured motorist coverage can be pretty valuable.

Remember, many people driving without car insurance often do not have the means to pay thousands of dollars in damages.

basic car insurance

PIP and Medical Insurance

It is similar to medical insurance but offers a bit more protection. PIP is an abbreviation for personal injury protection. PIP differs from medical coverage in that it covers expenses incurred due to an injury, such as lost wages and rehabilitation costs. Medical coverage is a crucial aspect of car insurance. Even if your state does not require it, you should consider getting it.

Here’s more info on top-rated airport parking, the best parking spots in your city, the most affordable auto insurance for your car, and top-rated car washes near you.

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