Most people think of an auto insurance policy as a single line of coverage that protects them if they are in an accident. The truth is that most car insurance policies are made up of several different insurance coverage that are lumped together to form the car insurance policy. Understanding the different types can help you save money on car insurance.
Bodily injury liability is meant to pay for injuries that you cause to people other than yourself, and may include passengers in your car, pedestrians or people in other vehicles. Bodily injury is usually expressed as a split limit where the first value is how much the insurance company will pay for a single person and the second number is how much they will pay for everyone injured in the accident.
Property damage liability is usually packaged with bodily injury. This coverage will pay to repair damages you caused to the property of someone else, but it will not pay to repair your own car. Damaged property includes property other than cars, such as a mailbox or a building.
Collision coverage is not usually required by law but it is a good idea to have. Collision insurance pays to repair or replace your vehicle if it is damaged in an accident caused by you. If you drive an older car that is not worth spending much money to repair, consider dropping your collision coverage.
Comprehensive insurance pays for many different things. It covers your car being vandalized or stolen, will replace a windshield if it gets broken, and even covers property inside your vehicle. As with collision coverage, comprehensive insurance may not be necessary if you drive an older vehicle with little value.
Other coverage includes towing and roadside service, rental car reimbursement, and personal injury protection. Most of these are not required by law but supply you with added layers of protection. To get an idea of how you can save money by dropping unnecessary coverage, use online insurance quotes that allow you to custom design a policy and compare the cost of premiums against several different companies.