Auto insurance is a form of protection against financial loss in the event of an accident. It involves an agreement between you and an insurance company, where you agree to pay a premium and the company agrees to cover your losses as outlined in the policy. Auto insurance provides coverage for property damage, liability, and medical expenses.

A basic auto insurance policy consists of six different types of coverage, and while some are required by most states, not all are mandatory. If you're financing a vehicle, your lender may have additional requirements. Typically, auto policies are valid for six months to a year, and your insurance company will inform you by mail when it's time to renew the policy and pay the premium.

Bodily Injury Liability: This coverage applies to injuries caused by you, the policyholder, or any designated driver to others. It also extends to you and your family members when driving someone else's vehicle with their permission. Having sufficient liability insurance is crucial because in the event of a serious accident, you may be faced with significant legal claims. It's advisable to consider coverage beyond the state-required minimum to safeguard assets like your home and savings.

Medical Payments or Personal Injury Protection (PIP): This coverage pays for the treatment of injuries sustained by the driver and passengers in your vehicle. PIP can encompass medical expenses, lost wages, and the cost of replacing services normally performed by an injured person. It may also cover funeral expenses.

Property Damage Liability: This coverage covers damage you or someone driving your vehicle (with your permission) may cause to someone else's property. Typically, this refers to damage to another person's vehicle, but it also includes damage to objects like lamp posts, telephone poles, fences, buildings, and other structures your vehicle may collide with.

Collision: Collision coverage pays for damage to your vehicle resulting from a collision with another vehicle, object, or flipping over. It also covers damage caused by potholes. Collision coverage usually includes a deductible, typically ranging from $250 to $1,000. The higher your deductible, the lower your premium. Even if you are at fault for the accident, your collision coverage will reimburse you for repair costs, minus the deductible. If you're not at fault, your insurance company may seek reimbursement from the other driver's insurer, and you may be reimbursed for the deductible as well.

Comprehensive: Comprehensive coverage reimburses you for losses due to theft or damage to your vehicle caused by non-collision incidents. This includes events like fire, falling objects, missiles, explosions, earthquakes, windstorms, hail, floods, vandalism, riots, or contact with animals such as birds or deer. Comprehensive insurance usually includes a deductible, typically ranging from $100 to $300, and some companies offer glass coverage with or without a deductible, covering cracked or shattered windshields.

Uninsured and Underinsured Motorist Coverage: This coverage reimburses you, a family member, or a designated driver if any of you are hit by an uninsured or hit-and-run driver. Underinsured motorist coverage comes into play when an at-fault driver has insufficient insurance to cover your total losses. It also provides protection if you are hit as a pedestrian.

The law requires residents to purchase minimum limits of insurance. Bodily Injury, Property Damage and Personal Injury protection must be maintained at all times while driving a registered vehicle. Bodily Injury protection will protect you for liability arising from injuries that you cause to another driver. Property Damage protection will cover your liability to another driver for damage to their vehicle. Personal Injury Protection also known as “No Fault Coverage” is intended to cover your medical expenses regardless of fault up to $10,000. State minimum requirements for Bodily Injury are $10,000 per occurrence, $20,000 per accident. For property damage the Minimum limit is $10,000 per accident. When the limits are exhausted you are then held personally liable for the remaining cost of injuries and damages.

Purchasing insurance is a complex decision which involves many carrier, limit and coverage options. Online raters from direct carriers allow you to select limits on your own with very little or no guidance. It is important to understand your exposure and seek the guidance of a professional when purchasing auto insurance. A professional can explain the coverage options when deciding whether to purchase Uninsured Motorist, Physical Damage Coverage, Rental, Towing and Excess Medical Coverage. Additionally many professionals work with multiple carriers this allows them to shop for the best price and coverage combinations. We often see clients which have purchased insurance online that are severely underinsured and over exposed.