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Most people see getting auto insurance coverage as just a single decision of which company to choose. But actually, each policy has at least four important decisions that need to be made before you select an insurance company. Because there are four distinct types of auto insurance coverage and you need to select the right protection for each one.
If you're in an accident caused by a driver with little or no insurance, you need uninsured or underinsured driver coverage. This handles your expenses that the other driver's insurance doesn't cover. It's recommended you get a minimum of $50,000 of this auto insurance coverage.
Liability auto insurance coverage deals with the accidents which you cause. Bodily liability pays for treating the people you injured and also will pay your legal expenses in a lawsuit. Any cars or other property you damage are covered with property liability. When getting liability coverage, you should consider $100,000 per person in bodily protection and $50,000 for property protection as minimums.
Damage done to your car in an accident is paid for by collision coverage. Comprehensive coverage pays to repair or replace your car for all other circumstances. Because major damage or loss happens relatively rarely, it's best to have the largest deductible you can afford, at least $500. If you have an old car that's worth no more than a few thousand dollars, it makes sense to drop this part of your auto insurance coverage.
When you or your passengers are injured in an accident, medical coverage pays the bills. If you already carry health insurance, you probably have adequate medical protection and can eliminate this portion of your auto insurance coverage. But you may want to have a minimal amount as protection for your passengers.
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