What options do I have when it comes to car insurance?

What type of coverage does auto insurance offer? The two main types of coverage available when choosing a car insurance plan are liability coverage and full coverage.

Liability coverage:
Auto insurance which offers liability coverage covers property damage and bodily injury which the insured driver is responsible for. Basically, liability coverage protects the policy holder from having to pay for damages which they caused. If you crash your car into someone else's mailbox, for example, the cost of the damages would be your responsibility, and may be covered by an auto insurance policy featuring liability coverage. One type of liability coverage is the "combined single limit" car insurance policy. If a driver covered by a combined single limit policy causes a collision in which another driver is injured and the other driver's vehicle is damaged, payments for a damage claim and a personal injury claim would be paid out by the same coverage. The second type of auto liability coverage is "split limit." Split limit coverage cuts the coverage into separate pieces. Bodily injury would be covered separately from property damage. In the above example, if the responsible party had split limit car insurance, damage to the vehicle would have been paid from different coverage than the injury to the other driver. The downside to this is that if the driver were only covered for $25000 to pay for physical damage and $25,000 to pay for personal injury, but the damage to the other driver's vehicle cost $10,000 and his medical bills cost $40,000, the responsible party would exceed his coverage. Even though his total coverage is $50,000 and he caused $50,000 in damage total, because he went over the limit for personal injury by $15000, he is liable for that amount and can be sued. Split limit car insurance coverage is usually denoted in the following format: "bodily injury per person"/"bodily injury per accident"/"property damage". For clarification, liability auto insurance of $25,000/$75,000,$35,000 would cover up to $25,000 per person injured with a maximum payout of $75,000 towards the bodily injury of all covered parties and a maximum of $25,000 to cover property damage. Most liability car insurance also covers rented vehicles. While car rental agencies often offer additional insurance, it is usually unnecessary if you are already insured. Additional car insurance may be useful, however, in the case where the rental car is worth more than the amount your insurance is able to cover.

Full coverage:
Full coverage auto insurance is a combination of collision, comprehensive, and usually liabilty coverage implied. Collision coverage: Collision car insurance covers all vehicles involved in a traffic collision. It exists to pay for repairs to vehicles damaged in a collision and possibly to finance the cash value of a vehicle if it was totaled. A car is considered "totaled" if the cost of repairs would exceed the market value of the vehicle. Collision motor vehicle insurance is subject to a deductible.

Comprehensive coverage:
Comprehensive auto insurance covers damage to the insured party's vehicle which are not caused by a traffic collision. Theft, vandalism, fire, weather, and damage from animals fall under the sorts of things covered by comprehensive car insurance. Additionally, most comprehensive coverage will also pay for damages caused by flooding, hail storms, tornadoes, hurricanes, and other acts of nature. Like collision coverage, comprehensive vehicle insurance is subject to a deductible. Uninsured coverage can be thought of as reverse-liability insurance. An example of uninsured coverage being useful would be if a driver were in a collision caused by a second, uninsured or under-insured driver. Normally, the liability coverage of the at-fault motorist would cover damages to the other involved vehicle and personal injury to the other driver, but if the at-fault driver doesn't have liability coverage or enough liability coverage, uninsured coverage by the driver who was not at fault would kick in and help pay for the damages.

GAP coverage:
GAP auto insurance is used to cover the negative equity of car in the case of a claim being filed. Negative equity describes the discrepancy between the price paid for a car and value of the car shortly after purchase, since a car's value declines sharply immediately It's possible to purchase a new vehicle for $18,000, but the value of the vehicle is only $14,000. If the owner were in a collision and the vehicle were totaled, he might still owe $18,000 on the car, but normal insurance would only pay $14,000 because that was the value of the vehicle. GAP auto insurance would cover some or all of the difference of $4,000.

Towing coverage:
Some car insurance policies will also have vehicle towing coverage (aka roadside assistance), which will cover the cost of getting a car towed for some reason other than an collision which would normally be covered by the policy. These cases may cover the cost of a tow needed because of a flat tire, breakdown, or running out of gas.

Distance-based coverage.
Some motor vehicle insurance can be prepaid, and is good for a certain distance. In this system, the insured party pays for auto insurance ahead of time, and the coverage expires when the odometer of the insured vehicle reaches the mileage limit. Additional insurance must be purchased before the odometer reaches the mileage insurance has been purchased up through.