When shopping for car insurance or automobile insurance, there are typically three main areas of coverage that you want to consider prior to selecting a policy. Within each area of coverage, you’ll need to decide the amount of coverage that you want. Below, I’ve outlined the three main areas of coverage, two of which are required and included with every insurance policy, and the final will be additional/optional coverage that can be added onto your auto insurance policy.

Liability and Medical Coverage

Liability Coverage
If you are at fault in an accident that is covered by your policy, and others (people or property) are injured or damaged, liability coverage will help to protect you from the cost of these damages. Without insurance, and more specifically liability coverage, the entire cost of damages from an automobile accident could become your financial responsibility.

Medical Payments Coverage
If you’re involved in an accident, the medical payments coverage option will help pay for necessary medical bills. It’s always a good idea to have a high amount of medical payments coverage on your car insurance policy.

Underinsured / Uninsured Motorist Coverage
If a driver with little or no insurance damages your car, or injures you or someone riding with you, the uninsured motorist coverage option can help cover repairs and expenses. Though its always a good idea to have uninsured motorist coverage, the amount of coverage that you need will often depend on the area that you live, the type of car that you drive, the amount of driving that you do and the areas that you typically drive your car. If you live in the suburbs in a nice neighborhood and don’t leave often, you won’t have a very high need for uninsured motorist coverage, however if you live in the city and drive through poor parts of town, uninsured motorist coverage would be a good idea for you. (Underinsured/uninsured motorist coverage is often subject to certain limitations, however, so check your individual policy, or talk to your agent for more details.)

Vehicle and Property Protection

Collision Coverage
This option helps protect you from repair costs to your car if you’re involved in a covered accident. Considering it’s a covered loss (that’s insurance-speak for an accident that’s specifically covered by your policy), Collision coverage helps pay for the repairs needed to get your car back on the road. Keep in mind that if you are not at fault in the accident, the repairs will typically be paid by the at fault party’s insurance (unless the at fault party is uninsured - that is where uninsured motorist coverage comes in handy).

Comprehensive Coverage
This option helps protect your car in situations that do not necessarily involve other drivers or vehicles. If your car is damaged by a storm, vandalism, or “passive object” (such as a tree or a post in a parking garage) which fell and was not caused by collision or some other freak accident, comprehensive coverage will save you. I wish I had higher comprehensive coverage and lower deductible when my car was broken into last year.

Additional Protection (Optional Coverage Options)

Personal Injury Protection
Some insurance companies will offer coverage that will help to reimburse you for lost income, child care expenses, medical expenses, and other similar things if you’re hurt in a covered accident. Personal Injury protection is not available in some states, and not available through all insurance providers. The amount of reimbursement is typically based on the coverage that is purchased in your policy.

Additional Coverage Options
Additional coverage options offered by auto insurance companies can include, but are not limited to:

• Towing Cost Coverage
• Repair Cost Coverage
• Rental Car Cost Coverage
• Rental Car Reimbursement
• Sound System Coverage
• Car Contents Coverage

These additional coverage options might be included through some insurance companies policies, and sometimes will have to be added on separately.

All of these options and optional items should be considered when you are looking to purchase new auto insurance policy.