Looking for the best auto insurance can be daunting. In today's market, there are so many policies on offer, each with their own terms and conditions, strengths and weaknesses, which makes it a challenge to find the best auto insurance for your personal needs. That's why we at GET.com have put together this simple guide to auto insurance for this season. It outlines the different types of coverage available and the minimum requirements of each state when it comes to auto insurance.

In This Auto Insurance Guide:

What Is Liability Auto Insurance?
What Is Collision Auto Insurance?
What Is Comprehensive Auto Insurance?
What Is GAP Auto Insurance?
What Is Umbrella Insurance?
Do I Need Uninsured/Underinsured Coverage?
How Can I Find The Best Insurance Rates?

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  1. What Is Liability Auto Insurance?

    Liability insurance is the basic type of auto insurance required in nearly every state. It is designed to make sure that drivers can cover the costs of damages to other people and their property in the case of an accident. It is split into two categories: bodily injury liability and property damage liability. While minimum liability insurance varies from state to state, the only state exempt from any type of liability insurance is New Hampshire. Here, drivers must prove they are able to provide sufficient funds to cover the cost of any ‘at-fault' accidents.

    Minimum liability by state

    The minimum liability limit for each state is written as a series of three numbers. It looks like this: 10/20/30. Each number stands for the maximum dollar amount (in thousands) that the insurance company will pay out, broken down into three categories. For example, the minimum liability limit in Indiana is 25/50/10. This means that in the case of an accident, up to $25,000 would be paid out per person for personal injuries, up to $50,000 would be paid out in total for bodily injuries (regardless of how many people are involved), and up to $10,000 would be paid out in property damages. Although this example might have ample compensation for damages, the cap of $50,000 for bodily injuries per accident may leave you out of pocket in the case of an accident injuring a car full of people. It's also important to note that property damage liability does NOT cover your own vehicle. You can find out more about liability insurance and check the mandatory liability insurance in each state here.

  2. What Is Collision Auto Insurance?

    If you want to cover the cost of damages to your vehicle in the case of a collision (either with another car or an object), then you must purchase collision auto insurance. This policy is designed to pay for repairs and if necessary, replacement of your vehicle after a collision. If you took out a loan to purchase your car then collision auto insurance is automatically required. Owners of older cars may choose not to purchase this type of insurance as it may be cheaper in the long run to buy a new car than to pay the deductible for a repair (if you have a deductible) and the increased premium costs.

  3. What Is Comprehensive Auto Insurance?

    Comprehensive auto insurance covers the cost (minus a deductible if you have one) of damages to your vehicle caused by everything except collision. This includes fire, vandalism, weather, theft or attempted theft, and impacts with animals. Many insurance companies sell collision and comprehensive insurance policies together as a combined policy.

  4. What Is GAP Auto Insurance?

    GAP or Guaranteed Auto/Asset Protection is a type of insurance policy that covers the cost of the amount still owed on a vehicle despite its cash value. For example, if you take out a $20,000 loan to pay for a car and it is valued ‘by the book' as worth $15,000. If you were involved in an accident and the car was totaled, the extra $5,000 you owe the loan company would not be covered by your insurance policy and you would have to continue to pay it back - unless you have GAP insurance! This type of auto insurance is commonly purchased upfront, which means that you are entitled to the appropriate refund when refinancing or selling your vehicle.

  5. What Is Umbrella Insurance?

    Umbrella insurance takes your insurance coverage to the next level in terms of financial safety. It provides holders with an additional layer of security, covering any additional costs for accidents not covered by other types of insurance. Although this may seem overly cautious, umbrella insurance would be a lifeline if you were ever involved in a serious car accident causing extreme damage and a lengthy lawsuit. Find out more about umbrella insurance here.

  6. Do I Need Uninsured/Underinsured Coverage?

    Also known as UM/UIM, this provides coverage for an accident if an at-fault party does not have insurance or does not have enough insurance to cover your damages. This is done by a process called subrogation. Although this may not seem like a fair precaution, the number of uninsured drivers is alarmingly high and was at 13.8% in 2009 (the latest year with available statistics from the Insurance Information Institute). The problem of uninsured motorists varies greatly from state to state. In 2009 the worst place for uninsured motorists was Mississippi, a staggering 28% of its motorists uninsured - nearly one third of the total number of drivers!

  7. How Can I Find The Best Insurance Rates?

    As you can see, the issue of auto insurance is by no means clear cut and depends on a number of factors - primarily where you live and what car you drive. Taking into consideration all possible accident scenarios when taking out auto insurance is important. You should also calculate what you can realistically afford in terms of expenses and choose an insurance that suits that budget. When purchasing insurance, providers often offer special deals for buying more than one type of insurance at a time, something to keep in mind when looking for the best auto insurance rates.

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