The 411 on different types of auto insurance


 The 411 on different types of auto insurance

You've probably heard the term "auto insurance" before, but are you really sure what it means? Auto insurance is not just one kind of coverage - it's a blanket term for a variety of liability and other kinds of auto-related policies. Understanding the different types of auto insurer is important if you're looking to get the best financial protection at a reasonable price.

In this post, we'll walk you through the basics: liability insurance, collision coverage, comprehensive coverage, uninsured/underinsured motorist coverage and roadside assistance.

The first sentence should be straightforward enough to anyone who has been reading these blog post topics in descending order (hence my remark above about jumping around). However, the rationale for this blog post is quite simple - we all want to protect ourselves, period. Understanding the choices which auto insurers offer is important if you're looking to fill that aforementioned protected position on the insurance market.

Simply put, a liability policy will pay out when someone else is at fault for an accident. This means that even if you're not at fault for an accident, a lot of companies will reserve some of their liability protection (usually in addition to their bodily injury portion). The higher your deductible, the lower your coverage. Also note, if you're driving a leased or financed vehicle, you'll need to look into the fine print of your lease/loan agreement. Some leases/loans require a certain liability coverage amount in order for the lessee to pay it off.


If your car is damaged in an accident which you are not at fault, this type of insurance will pay for the damage to your car as long as it is not considered a total loss (more on that later). A deductible usually applies here as well.


In the event of a total loss, comprehensive claims are paid to repair or replace your car. The deductible and policy amount vary, but you usually want it to cover the entire cost for repairs. Also, if your car is totaled after an accident that you are not at fault for, this will not affect the comprehensive coverage.

##Uninsured/Underinsured Motorist (UM/UIM)
If you don't have enough auto insurance that covers bodily injury and property damage in an accident caused by someone else (typically as a result of running a red light), uninsured or underinsured motorists coverage kicks in. It's essentially a last resort after you've exhausted your bodily injury liability coverage that covers you when someone else cannot pay for the cost of an accident. In addition to this, UM/UIM helps protect you against hit-and-run accidents.

##Roadside Assistance
This is an optional coverage that protects you from having to pay for a tow if your car breaks down and leaves it stranded on the side of the road. All in all, auto insurance is very complicated and there is more than one type of policy available to you. So, before you jump into an auto insurance agreement, ask yourself the following questions: what do I need to protect myself? What do I have the financial means to pay for in the event of an accident? Ask your agent these questions if you're unsure about anything. You've heard it before, but knowledge is power!

##Author Bio

Written by Michelle Rink. She's currently studying psychology at the University of Alaska Anchorage (Go Seawolves!). As an Atlanta native who loves making new experiences and meeting new people, she is very happy to be living in Anchorage, Alaska for the next year or two. Her other interests include reading about business and economics and volunteering at youth/community centers as often as possible.


The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of AIG, its management, employees, owners or associates. AIG is not responsible for the accuracy or completeness of any information or data referred to in this article. This article has been written for informational purposes only. Visitors should not consider it as investment advice nor make use of any information contained herein without first seeking appropriate independent professional advice.

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Insurance services are provided by Allstate Agency, LLC (doing business as Allstate Insurance Company), a licensed insurance agency of Pennsylvania.

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Keywords: auto insurance collision insurance comprehensive insurance liability uninsured/underinsured motorist coverage roadside assistance

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30.4.2015..The..Different..Types..of..Auto-Insurance....rar 30.4.2015The Different Types of Auto InsuranceRinkUnderstanding the different types of auto insurance helps you choose the best coverage to protect yourself and your car by Michelle Rink.*This post was written by Michelle Rink, a member of the Allstate Blog Squad covering financial literacy topics and trends.


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