Auto insurance laws and enforcement vary from state to state but insurance coverage liability for injuries and property damage done to others is mandatory in most states. For example, in the New Hampshire, it is not compulsory for motorists to carry liability insurance. Meanwhile, for Virginia residents it is compulsory to pay the $500 annual fee per vehicle if they opt not to purchase liability insurance. Penalties for refusing to avoid purchasing car insurance vary by state, but are accompanied by significant fines, registration and/or license suspension or revocation, as well as potential jail time.

It is important that you obtain the proper coverage to safeguard yourself, your family, your finances, and any business. Car insurance is vital in protecting you and your family against personal financial loss in case of an accident. When you buy an automobile insurance policy, it is a legal contract between you and the insurance company. Basically, you agree to provide the auto insurance company a premium and in return, the company covers your losses as outlined in your insurance policy.

Vehicle insurance includes property, liability, and medical coverage:

Property coverage of damage or theft to your automobile.

Liability coverage of your obligations under the law to others for bodily injury or property damage.

Medical coverage of treating injury costs, subsequent rehabilitation; may provide coverage for lost wages and funeral expenses.

Mainly, car insurance policies are for six months to twelve months. The car insurance company notifies you automatically via email or post when the policy is up for renewal.

An auto insurance policy is composed of predominately six kinds of coverage. The following are the six basic forms of coverage:

  1. Bodily Injury Liability

This insurance coverage refers to your injuries, the designated driver, the policyholder, and any injuries caused to others involved in the vehicle accident. The coverage protects you and your family as listed on the policy as well when driving another’s car with their permission.

You may want to evaluate having more than the mandatory state minimum, in case of a severe accident. Protect your long-term financial circumstances and not expend your home and life savings to pay off a lawsuit borne out of an accident.

  1. Personal Injury Protection

Medical coverage pays for injury treatment of the driver and passengers of the policyholder’s car. It may cover certain additional lost wages, medical costs, and funeral expenses.

  1. Property Damage Coverage

It offers protection for damage that you or an authorized vehicle driver causes to another’s property. Normally, it includes damage to the other’s car, but may consist of damage to other property such as, lamp posts, telephone poles, buildings, fences, or any other structures your car hits.

  1. Collision Coverage

This covers damage to your vehicle as a consequence of a collision with another vehicle, or structure and flipping over. The coverage also offers protections against damage caused by potholes. Once you pay your initial deductible, the car insurance company pays the remaining cost of the damage, even if you are at fault.

The main thing to remember is that the higher your deductible, the lower your premium.

  1. Comprehensive Coverage

This coverage provides for reimbursement for loss due to theft or damage caused by anything other than a collision with another vehicle or structure, such as an explosion, falling objects, earthquake, fire, riot, missiles, windstorm, vandalism, flood, hail, or contact with animals.

Additionally, damage to your shattered or cracked windshield is covered.

  1. Underinsured Motorist Coverage

This provides for coverage in case you, a family member, or a designated driver is hit by a hit-and-run or uninsured driver.

Coverage is also provided in case the at-fault driver’s auto insurance is insufficient to pay for your complete loss. Furthermore, the insurance coverage protects you in case you are hit by a vehicle as a pedestrian.