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Car Insurance


Here's a summary of the different types of insurance:

Liability: This kind of insurance is the only kind that might be required by law depending on the state you're in. This only covers other people and/or property/vehicles. The state doesn't care if you put yourself at risk. There is usually a certain amount for bodily harm/injury and a separate cap for the other person's vehicle.

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Bodily Injury: Covers expenses if you or your passengers are injured in a car accident.

Property: Covers property that you damage in a car accident.

Collision: This insurance covers your car in an accident with another car or an object.


Comprehensive: this is a misnomer. There is nothing comprehensive about this coverage. You still need liability and probably collision insurance before you get to comprehensive. This covers damage to your car if you hit a deer or other animal. (Collision will cover your car if you hit another car or property, but not an animal.) Falling limbs or acts of nature, like hail or floods are also covered under comprehensive insurance, not collision.


Uninsured Motorist insurance: This protects you if someone else hits you and damages you or your vehicle, but that driver has no or little insurance.

Gap Insurance: This may be required by your lender, or just a good idea if you are buying an expensive car (often new). If someone steals it two-days later, you may not have enough coverage to pay for it, being as it loses value the moment you drive it off the lot. Gap insurance will make up the difference between what it is worth and how much you still owe on it.

So that is it! A summary of car insurance types! So what does it mean if you have 50/100/25 coverage? See the next post for the answer!