Understanding Types of Auto and Home Insurance

Having the right auto and home insurance policy can make unexpected accidents and damage much easier to navigate. There are many options out there for auto and home insurance, and it can be hard to know the type and amount of coverage right for you. In this article, we’ll walk you through the different types of auto and home insurance coverage so you can find the right policy for your needs.

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Types of Homeowners Insurance

Homeowners insurance can cover a wide range of situations, from weather damage to theft to injuries sustained on your property. As you’re planning to purchase a homeowners insurance policy, understanding the different types of coverage will help make the process easier. There are several categories of homeowners insurance, each protecting a different aspect of your home and possessions. Here are four basic types of coverage that you need to know when shopping for homeowners insurance coverage:

Dwelling

Dwelling coverage covers the physical structure of your home. It’s specifically designed to cover the costs of repairing or rebuilding your home’s structure after damage from an unexpected event like fire, lightning, windstorms, hail, vandalism or theft. It does not cover the contents of your home or the land your home sits on.

Personal Property Coverage

Personal property coverage, sometimes known as contents coverage, helps protect your personal belongings if they are damaged or stolen. This includes furniture, clothing, electronics and more. Personal property claims are typically either paid out in two ways: coverage for the cost to replace the item or a sum equal to the cash value of the item.

Personal Liability

Personal liability insurance helps cover bodily injury and property damage for which you or covered residents of your household might be legally responsible for. This includes injuries that occur on your property (such as a dog bite) or damage that occurs on someone else’s property (for example, your child accidentally breaking a neighbor’s window).

Loss of Use & Additional Living Expenses

If your home is uninhabitable while being repaired or rebuilt due to damage from a catastrophic event, loss of use and additional living expenses coverage can help. This type of coverage can pay for lodging, meals, animal boarding and other expenses while you are displaced.

Types of Auto Insurance

If you’re shopping for auto insurance or looking to update an existing policy, it’s important to know the different types of coverage available. Understanding the types of auto insurance and what they cover will give you peace of mind knowing what’s covered if you get in an accident, and will make it easier in the event you need to file a claim. Keep in mind that while some types are optional, there are specific coverages you’re required to have on your auto insurance policy. There are six main types of auto insuranc e coverage.

Bodily Injury Liability

If you are found to be at fault in a car accident, bodily injury liability insurance will cover medical and rehabilitation costs for any injured passengers, as well as funeral expenses. Most states require you to have bodily injury liability coverage on your auto insurance policy.

Property Damage Liability

Property liability coverage covers the damage you cause if you’re found at fault in an accident. This can include parts and labor for car repairs, property inside the other party’s vehicle and any other objects you may have hit and damaged in the accident. This type of coverage does not cover damages to your own vehicle. Similar to bodily injury liability coverage, most states require you to have property damage liability coverage on your policy.

Personal Injury Protection (PIP or No-Fault)

Personal injury protection coverage, also known as PIP or no-fault coverage, covers certain expenses no matter who is at fault in an accident. This includes medical expenses (like hospital, rehabilitation or in-home assistance costs), as well as lost wages and funeral expenses for you and/or your passengers. Only certain states require you to have PIP coverage.

Uninsured/Underinsured Motorist Protection

Uninsured/underinsured motorist protection covers medical expenses, rehabilitation and funeral costs incurred by you and/or any other passengers if you are hit by a driver with either no coverage or not enough coverage. Lawsuit settlements caused by uninsured/underinsured or hit-and-run drivers can also be covered under this coverage.

Collision

If you’re found at fault in an accident, collision coverage will pay for any damages to your vehicle, up to and including your vehicle’s cost. Collision coverage is typically only required if you owe money on your auto loan or if your vehicle is leased.

Comprehensive

Comprehensive plans cover damage to your vehicle from events that are out of your control. This includes natural disasters, vandalism, theft or other unpredictable events. Comprehensive coverage will only reimburse you for the depreciated value of your car, so it’s more valuable if you have a newer vehicle.

How much auto and home insurance do I need?

There’s no single rule of thumb when it comes to how much auto and home insurance coverage you need, but our coverage quiz can help give you an idea of what type and how much coverage might be right for you.

SelectQuote Can Help Find an Affordable Home and Auto Insurance Policy For You

Getting a free auto insurance or home insurance quote is as easy as getting connected with SelectQuote. We’ll get to know more about your needs, ensuring we find a quote for the kind of coverage that’s right for you. We can shop dozens of policies in just minutes, saving you time while also saving you money on home and auto insurance that works within your budget. At SelectQuote, we shop, you save.