Property Insurance

Property insurance is just what it sounds like. It protects your personal property, like your home, auto, boat, motorcycle, etc. Pretty much anything you own can be insured. Since most people are familiar with auto insurance, we use that as an example for this discussion.

Auto insurance is a policy that can be purchased from an insurance company that writes property insurance. It has several parts to it. The parts that protect your vehicle from damage are called comprehensive and collision. Collision covers your car from any damage that occurs in a collision with anything — another car, a post, a garage, a mailbox. Comprehensive covers your car from any damage that occurs from something other than a collision, like hail, a tree branch falling on the car, or vandalism.

Car insurance also has a liability portion. Liability protects you from having to pay any damages you cause when you are driving your vehicle. For example, if you hit another car and damage it, the liability coverage will pay to fix or replace the other car. There is also a part of your policy that is called uninsured/underinsured. This pays for any damage to you or your car that is caused by another driver who either does not have insurance, or who does not have enough insurance to cover the accident they cause. Finally, there is the medical section of the policy. This pays any medical bills you incur from a car accident.

Everyone who owns and drives a car is required to have car insurance. State governments set minimum amounts of liability coverage you must buy. They do this to protect everyone on the road from any damage you might cause while driving. Also, if you have a loan or a lease on your car, your financing company will require you to carry comprehensive and collision insurance. This is so the finance company can get its money back if you wreck the car.

Car insurance is a protection that every driver needs. Be sure to buy and maintain your coverage.