A loon into the ideal auto insurance that one should carry

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27There are a whole range of factors that have to be considered in order to arrive at what is the right amount of auto insurance that one must carry.  While some of these factors such as deductibles are entirely individual there are some factors that depend on the state you live in and whether you have purchased the vehicle outright or whether it is on lease or financing, and whether the vehicle has been customized etc.

To get a better understanding one has to break up the auto insurance into 6 elements:

Property damage liability – this is very similar to bodily injury liability  but the only major difference here is that it covers damage to the vehicle, repairs and replacements etc, whereas in the bodily injury liability injuries and lawsuits concerning people are taken care of in case of an accident.  Property damage liability will also cover items that the other person is carrying or good that you are carrying such as laptops etc.  Some property damage liability is compulsory in most states but there are many states which require a very low amount of $5,000 which would hardly suffice to take care of repairs of the vehicle, let alone the electronic goods that are carried by most people.

Bodily injury liability – most states require bodily injury liability as it is a very important component in auto insurance.  In the event of an accident with another vehicle, medical costs are covered on those who have sustained injuries and it also covers the lawsuits that are filed by the other party who has been hit.  It is usually calculated per person and the insurance cover per person could range between $100,000 to $300,000.

Personal injury protection – here the medical as well as the funeral costs are covered if involved in an accident.  But if any other insurance is already taken then PIP is not required.

Collision and comprehensive – while collision coverage only covers the repair and replacement costs in case of an accident, the comprehensive package will cover against even other acts of vandalism and natural disasters etc.

Uninsured motorist protection – this is similar to PIP but comes into force only in an accident with a driver who is uninsured.

Policy add-ons, upgrades, and extras – rental coverage, glass coverage and other add-ons may be added to the policy if required.  Then in case of an accident you will not be required to pay out of your pocket.