Auto insurance - The besics

1. Collision - While not mandatory, this reimburses damage to your car that results from an accident. Collision generally comes with a deductible, as much as $1,000, which you are required to pay up front. If the accident was not your fault (and of course it never is), your auto insurance company might reimburse you for the deductible amount.


2. Comprehensive - Reimburses for loss due to theft or damage caused by something other than an accident such as fire, earthquakes, falling objects or getting hit by very large animals such as deer, moose or confused rhinos. This coverage, seldom mandatory, usually comes with a small deductible - although cracked or shattered windshields are often fully compensated.


3. Bodily Injury- Covers you, or a family member in case of injury caused to a third party. Adequate liability insurance is essential given the high cost of going to court and, if you’re found liable, paying the ensuing damages. Most states require liability insurance and the experts strongly recommend buying more than the state required minimum - as much as $100,000 per person and $300,000 per accident. Check into umbrella policies which expand coverage and increase compensation limits.


4. Medical Payments or Personal Injury Protection (PIP)- Pays the hospital and doctor bills and lost wages incurred by the driver, or passengers, resulting from an accident.


5. Property Damage Liability - Pays for the damage you’ve caused to someone else’s automobile or property. Does the same if someone was driving your car without permission.


6. Uninsured and Underinsured Motorist - Compensates you or a family member if involved in an accident with an uninsured motorist or a hit-and-run driver. Underinsured reimburses you if the driver at fault has an amount of insurance insufficient to compensate you for a total loss.