Auto Insurance Coverage -

Auto Insurance Coverage

Auto accidents, theft, vandalism, and natural disasters can create a huge financial burden to a car owner. That is why all states require you to purchase auto insurance with at least a minimum amount of liability coverage.

The basic types of liability coverage are outlined below. State requirements may vary for each of type of auto insurance coverage.

Liability coverage

Bodily injury liability: Protects your assets if you are held liable for an auto accident in which other people are injured or killed.
Property damage liability: Covers repairing or replacing the autos or other property of other people.
Uninsured/underinsured motorist coverage: Unless you live in a "no-fault" state (where your own insurance will cover your losses), this coverage insures you against losses caused by other drivers with little (underinsured) or no (uninsured) auto insurance.

In addition to liability coverage, there are some other auto insurance options available. Most of these are optional, but may vary from one state to the next.

Collision coverage helps pay the costs to repair or replace your car if it is damaged in an accident.

Comprehensive coverage insures your car against damage caused by something other than an auto accident such as theft, vandalism, or natural disasters.

Medical/personal injury protection coverage covers some medical expenses not covered by your health insurance.

Fault/No-fault systems

In states with a fault-based system, auto insurance companies make payments based on each person's degree of fault in an accident. This is often determined in the courts.

In states with no-fault systems, the insurer pays for economic damages up to the policy limit. There are 13 states that have adopted a no-fault systems:

Colorado
Florida
Hawaii
Kansas
Kentucky
Massachusettes
Minnesota
Maine
New Jersey
New York
North Dakota
Pennsylvania
Utah

Auto insurance rates are determined my a number of factors:

Geography
Driving violations
Your vehicle
Accident claims
Credit rating
Occupation
Your age
Gender
Marital Status
Miles driven per year
Distance to work
Occupation
Years of driving experience
Multiple cars and drivers
Business use of the vehicle
Whether or not you currently have auto insurance
Theft protection devices

The ten largest auto insurance companies are:

1. Allstate Insurance
2. Chubb Group of Insurance Companies
3. Farmers Insurance Group
4. GEICO Insurance
5. GMAC Insurance
6. Hartford Financial Services Group
7. Liberty Mutual
8. MetLife Insurance Company
9. Nationwide Insurance
10. Progressive Insurance