It's necessary to have auto insurance coverage, not only because it is mandated by law, but more importantly, because you and your family need protection. The extent of protection your auto insurance provides depends on your policy's features. It's important to have a working knowledge of the different ways by which auto insurance can protect you, so that you can choose a good policy that is best suited to your needs and finances.

While price is of importance when deciding which type of auto insurance coverage you will get, you should also consider whether the policy you are getting provides the features you need. Otherwise, it will be in vain to get an auto insurance policy because it won't work for you when you need it the most.

Auto Insurance Policy Features

The most basic auto insurance coverage is liability coverage, which covers the costs of bodily injuries to the other driver and his/her passengers and damage to property as a result of an accident that is your fault. Otherwise, you would have to shoulder this from out-of-pocket, or, if you are unable to pay, the victims may sue you and go after your properties.

Two other types of auto insurance coverage are collision coverage and comprehensive coverage. Collision coverage covers the cost of repair or replacement of your car due to an accident. Comprehensive coverage includes damage to your car caused by non-vehicular accidents like theft, fire, bad weather, vandalism or falling objects.

Then, there is medical payments coverage, which takes care of medical bills you may incur if you or your passengers are injured in an accident in your car – regardless of who is at fault. If the other party is at fault, and he is under-insured, your auto insurance medical payments coverage should cover that part of your medical bills that can not be covered by the other party's insurance.

Part 2