Today, having your car insured is a necessity if you want to stay cool with the law. Driving a car with no insurance even for a single day is quite risky, as you may face a hefty fine, license suspension and even some time in jail, depending on the state where you've been caught. Besides, car insurance is a very effective tool of protecting you and some of your assets if something happens on the road. It pays for the damages you deliver to other vehicles, the infrastructure and the injuries you unintentionally deliver to people in other cars as well. Without insurance paying for such liability would cost you a fortune.

The liability part of insurance policy pays for the injuries and damages you deliver to others while being at fault. This is the basic type of coverage that is included in all insurance policies. Liability coverage is divided into two types : bodily injury and property damage. Bodily injury coverage, as you may guess pays for the damages you deliver in an accident to others, and is usually set as per person and per accident value. Property damage pays for the damage to the other vehicle or infrastructure (fences, poles, signs, etc.). Each state sets liability coverage minimums that any policy should comply with. However, it is recommended that you buy more of this coverage in order to make sure that serious accidents will be covered in full.

Collision coverage reimburses the repair costs of your car after an accident. It is regarded as the most expensive part of any policy. Insurance companies aren't very happy for paying the repair costs especially when they exceed the actual value of the car. When this happens, most insurance companies tend to cover only the actual value of the car since it's much cheaper than paying for the entire repair. Comprehensive coverage pays for the damage to your car on the road other than those of direct collision with vehicles, but excluding natural disasters, fire, theft and vandalism.

Uninsured and underinsured motorist coverage pays for the damage to your car caused by vehicles that don't have any or insufficient auto insurance coverage. Taking the fact that it's hard to find cheap auto insurance these days and many drivers choose to drive without any insurance coverage, this type of insurance is particularly useful. It also covers in cases of hit-and-run drivers when the other party has perished from the scene right after the accident.

There are additional specific types of coverage that will protect you against specific perils such as fire, tornado, earthquakes and flood. However, these types of coverage will cost you additional money and make your auto insurance policy more expensive. So if you are looking for a cheap policy, then you definitely don't need these types of coverage. But if you want to make sure that your car will be covered against different perils, then you should think about getting one of these additional types of coverage, according to our exact needs.