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Auto Insurance and Home Insurance Basics

Learn about six types of auto insurance and four types of home insurance

Auto insurance and home insurance are not just about protecting your car or home, but they’re also about protecting the people you love in them. Understanding the various types of auto and home insurance can seem intimidating, which is why we’ve put together an overview of the most common coverages to help you grasp the basics before buying. 

Six Types of Auto Insurance

There are six main types of auto insurance coverage:

  1. Bodily Injury Liability

    If you are at fault in a car accident and have bodily injury liability insurance, your insurance provider should cover medical, rehabilitation and funeral expenses sustained by all injured passengers, including those not in your car.

  2. Property Damage Liability

    Property damage liability coverage kicks in when you’re at fault for a car accident. This typically covers parts and labor for car repairs, property inside the other party’s vehicle, and/or any items you may have hit. While this plan will also pay certain legal expenses, it does not cover damages to your own vehicle or property.

  3. Personal Injury Protection

    Personal injury protection, regardless of who is at fault, covers most medical expenses—including hospital, rehabilitation and in-home assistance costs—along with lost wages and funeral expenses incurred by you and/or your passengers.

  4. Uninsured / Underinsured Motorist Protection

    If you are hit by a driver with either no or inadequate coverage, uninsured/underinsured motorist protection pays for the medical expenses, rehabilitation and funeral costs incurred by you and/or any other passengers in your vehicle. It can also pay for the settlement of any lawsuits caused by an uninsured, underinsured or hit-and-run driver.

  5. Collision

    Collision coverage pays for any damages to your vehicle, up to and including your vehicle’s cost, if you are at fault in a car accident.

  6. Comprehensive

    A comprehensive plan covers damage to your car from an event that’s out of your control, such as a natural disaster, theft, vandalism, or other unpredictable events.

Four Types of Home Insurance

Coverage and cost varies from state-to-state, but the four main types of coverage for homeowners insurance include:

  1. Dwelling

    A main component of home insurance policies, dwelling coverage helps cover the costs to repair or rebuild the physical structure of your home in the event of a loss in which you have no control, including fire, wind, theft and vandalism.

  2. Personal Liability

    Personal liability insurance provides coverage for bodily injury and property damage sustained by others for which you or covered residents of your household might be legally responsible for.

  3. Personal Property

    Personal property insurance coverage helps protect personal belongings such as furniture, clothing, sporting goods or electronics in the event of a covered damages or theft.

  4. Additional Living Expenses

    This portion of coverage can pay for your lodging, meals, animal boarding and other expenses in the event that you are unable to stay in your home due to a natural disaster or other unpredictable events over which you have no control.

There are many other additional coverages, like umbrella insurance, which can be added to these policies. Umbrella insurance—also referred to as excess liability insurance—protects you and your assets when you’ve exhausted the limits of your home insurance.

Importance of Homeowners Insurance and Car Insurance Coverage

There’s a lot to know when it comes to auto and home insurance, which is why we have added some other resources for you below:

As for your homeowners and auto insurance, it’s important to make sure your most valuable assets are protected at a price that works with your budget. Whether this is your first time buying home and auto insurance or if life changes have you evaluating your current coverage, we can help you find the right plan for your current situation. We work with some of the most trusted home and auto insurance carriers and can find you opportunities to save both time and money such as combining or bundling policies. We’ll help you find reliable and affordable auto and home insurance to provide all the protection you need at a price you can afford.

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