Many people are going to wonder what does auto insurance cover, especially since they have to have it by state law. It's difficult to purchase something if you don't know what you're purchasing, and yet, all states require every vehicle on the road to have some sort of vehicle insurance.
If you check with your state law there's a good bet that you're going to find that you must carry property damage and personal injury protection on your vehicle insurance policy. This is called liability insurance, and it's to help pay medical bills or property damage that may be caused by an accident.
Without it, if you're found at fault in an accident you can be responsible for any injuries to any person involved in the accident. This can work into the hundreds of thousands in medical bills, you can lose your house, your land, and of course, anything else you own that is considered an asset. This is why liability insurance is extremely important if you're going to be driving.
Property damage is used to cover property damage that may happen if you are considered to be the one that caused the damage. In other words, this will cover the other driver's vehicle should you damage the vehicle in an accident. It also will cover fences, buildings, and other of property that can be damaged during an accident.
These are the two types of insurance that most states demand that you carry should you be driving a vehicle on the roads. The other type of insurance is considered comprehensive and collision damage insurance.
Collision and comprehensive damage insurance is to repair your vehicle or anything else you be the one to cause an accident. This is an extra expense and not demanded by the states themselves.
Usually, the loan company who you financed your vehicle through demands this type of insurance. In other words, if you have not paid off your vehicle finance company will demand that you are the have comprehensive and collision damage on the vehicle that you're driving. This is to replace the vehicle or at least have the financier paid off should your vehicle be totaled in an accident
Make sure if you're going to be driving a vehicle that you have adequate insurance to protect any assets you own. While it might be tempting to save by using a lowest liability amounts your state demands, if you have a multitude of assets to protect, you should raise your limits.
