Auto insurance is a policy purchased by vehicle owners to mitigate costs associated with getting into an auto accident. Instead of paying out-of-pocket for auto accidents, people pay annual premiums to an auto insurance company; the company then pays all or most of the costs associated with an auto accident or other vehicle damage.
- Liability – legal responsibility to others for bodily injury or property damage. First there is a per person number and a per accident number. State minimums in a lot of states are very low.
- Property – damage to or theft of your car. You should have at least $100,000 to $300,000 bodily injury and property damage. Then there is property damage, that is damage you cause with your car in an accident. I recommend we put that at $100,000.
- Medical – costs of treating injuries, rehabilitation, and sometimes, lost wages and funeral expenses. In New York State there is something called PIP, which is medical coverage. That varies a lot per state.