Basic Car Insurance (2024)

FAQs

Basic Car Insurance? ›

While different states mandate different types of insurance and there are several additional options (such as gap insurance) available, most basic auto policies consist of: bodily injury liability, personal injury protection, property damage liability, collision, comprehensive and uninsured/underinsured motorist.

While different states mandate different types of insurance and there are several additional options (such as gap insurance) available, most basic auto policies consist of: bodily injury liability, personal injury protection, property damage liability, collision, comprehensive and uninsured/underinsured motorist.

You can buy many different types of car insurance policies. However, most basic car insurance includes liability protection. In fact, most states require a certain limit for these policies. They may also want you to have uninsured/underinsured protection and comprehensive coverage.

Basic car insurance provides the minimum protection allowed by your state's laws. Depending on the state you live in, it typically covers property damage for another driver and may cover injuries for them and their passengers or you and your passengers.

It covers any damages you may cause to other people or their property when driving your vehicle. This includes damages to other people's cars, homes, yards and belongings, as well as any medical bills that may result from an accident you're considered “at fault” for.

What Is the Difference Between Liability and Full Coverage? Liability car insurance only covers damages to other vehicles or injuries to other people when you're driving. Full coverage insurance includes liability coverage along with other types of insurance to protect not only others, but also yourself on the road.

Typically, fully comprehensive insurance is the least expensive, though prices are influenced by individual circ*mstances.

Liability insurance is generally the cheapest car insurance coverage because it only covers the cost of bodily injuries and property damages for another party if you're at fault for an accident. It doesn't cover damages to your vehicle or costs associated with your injuries.

How do you explain insurance for dummies? ›

Insurance is a contract, represented by a policy, in which a policyholder receives financial protection or reimbursem*nt against losses from an insurance company. The company pools clients' risks to make payments more affordable for the insured.

Insurance companies can provide personalized premiums based on your risk factors by asking questions. Those with a clean driving record and a low likelihood of accidents may enjoy lower rates. This ensures that you pay a fair premium based on your individual circ*mstances.

Insurance is a financial safety net, helping you and your loved ones recover after something bad happens — such as a fire, theft, lawsuit or car accident. When you purchase insurance, you'll receive an insurance policy, which is a legal contract between you and your insurance provider.

Basic car insurance is often known as liability insurance. Requirements vary by state, but basic auto insurance can be broken down into two main types of liability insurance: personal injury and property damage.

Liability coverage: Covers medical expenses and repair costs the policyholder is liable to pay if they're responsible for causing an accident. Property damage coverage: Pays for vehicle damage or theft. Medical coverage: Covers the treatment of injuries, rehabilitation, lost wages, and funeral expenses.

Selecting the “Basic” Form of insurance coverage will ONLY cover your property from named perils. This simply means your property will only be protected from the causes of loss that are specifically identified on your policy.

Understanding auto insurance—the basics

Auto insurance provides coverage for: Property – such as damage to or theft of your car. Liability – your legal responsibility to others for bodily injury or property damage. Medical – the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.

While both protect your vehicle, collision coverage is there if you get into a collision while comprehensive is for non-collision events that are out of your control. Voice Over: Having comprehensive coverage is a great way to know you're covered — no matter what unexpected events come your way.

1. Liability coverage. Auto liability coverage is mandatory in most states. Drivers are legally required to purchase at least the minimum amount of liability coverage set by state law.

Full coverage car insurance is protection that includes collision, comprehensive, and liability coverage. Often, you can supplement your insurance with uninsured motorist coverage, personal injury protection, medical payments, gap insurance, and other coverage options.