Most municipalities require that drivers have some sort of auto insurance policy in place. Different types of policies offer different types of coverage based on the needs of the driver and the legal requirements of the particular state. Insurance companies offer a variety of coverage and many car insurance policies are made up of a combination of these.

Liability coverage compensates for bodily injury and property damages other’s may sustain in the event of an accident, this may include the cost of medical treatment, loss of income, and even pain and suffering. Usually this also covers the cost of defense attorneys and court fees. The amount of coverage required by the individual driver varies from state to state. Collision coverage pays for the repair or replacement of a car damaged during impact with an object or another car. Comprehensive coverage disburses benefits in the event the vehicle is damaged as a result of a storm, fire, or theft, basically any event that is not considered an automobile accident.

Other coverage includes medical, which pays out regardless of who is liable for the accident, personal injury protection or PIP, which pays for the medical treatment of the insured driver, also uninsured motorist, which repairs the car if the accident was caused by an uninsured driver, or underinsured motorist, which takes care of damages caused by a driver with inadequate liability coverage.

An auto insurance policy can include a number of different coverage. To understand what an individual driver’s needs are, it is necessary to know the law within the state the driver is licensed. Liability insurance is required in 47 states, while only 15 require Personal Injury Protection. It is also important to understand the options available to each driver. Many people opt for a policy that will pay for a rental car, should their vehicle sustain enough damage as to deem it unsafe to drive, rental car coverage is often necessary especially if the car will take an extended period of time to adequately repair. Cars that are leased often require additional insurance to the difference between what the insurer compensates for a totaled car versus what the insured may still owe on the lease.

Aside from the wide range of personal needs to consider, budgetary restrictions can also come in to play and most people are interested primarily in the most affordable car insurance . While the cost of insurance coverage can fluctuate due to many factors, it is important for the driver to compare premiums. The value of the car must also be taken into account. The driver’s place of residence often affects the premium as well if there are high incidences of theft or car accidents. Driving records and age are also factors used to calculate the cost of an auto insurance policy. Also, opting for a higher or lower deductible can cause the price to fluctuate. These are all questions that need to be addressed in order to find an appropriate policy to suit the needs of the driver.