It is no secret all states require motorists to carry auto insurance. However, the state falls far short when it comes to explaining all those terms that make up an auto insurance policy.

At the risk of further complicating the picture, this article will touch on and explain collision, comprehensive, property damage liability, bodily injury liability, uninsured/underinsured coverage and personal injury protection. Some states require coverage that another state does not. It is in your best interest to understand your state’s minimum requirements.

In order to make an informed decision about what coverage to buy, here is a quick explanation of the above terms. Collision, as you might guess, covers your car if you have an accident. Collision comes with a feature called a deductible. If you select a higher deductible, your premium should be less expensive.

Comprehensive is that part of the coverage that covers loss or damage that doesn’t involve a collision. For example, let’s say someone hits a baseball through your windshield or your vehicle is stolen, the comprehensive portion of the policy covers you. Like collision, comprehensive comes with a deductible and like collision, the higher your deductible, the lower your premium.

If you cause damage to someone else’s car or any of their other property, property damage liability is the part of the policy covering those events. Always discuss this coverage with your agent.

If you cause injuries in an accident, the portion of the policy that covers those injuries is called bodily injury liability. Another feature to discuss with your agent.

A coverage called uninsured/underinsured motorist coverage is a coverage almost all people have at least heard about. It works like this, if the person who hit you doesn’t have insurance or doesn’t have enough liability insurance, this will pick up the difference. This is coverage some states require while others don’t. Another ask your agent coverage.

We all should be concerned about personal injury in an accident. Fortunately, a coverage called personal injury protection will pay if someone in your car is injured. This helps you keep your liability low.

Auto accidents are not pleasant events. One minute everything is fine and the next, boom, bang your car is smashed and the headaches start.

You have to deal with the other driver, the police, on scene emergency personnel, if any, and the ensuing time consuming details. In other words, your day has just assumed a whole new complexion.

The heck of it is after an accident is when the stuff hits the fan. Phone calls, police reports and maybe even a court appearance. And, for sure, you must contact your insurance agent or insurance company.

You will have to deal with a claims adjuster who will determine the extent of damage and what compensation you will receive. This same adjuster will decide who was at fault as well. This could have a drastic impact on the claim.

I could go on detailing the headaches and grief but I’d bet you probably have experienced at least one accident in your driving career. Simply recall the gory details. The one phrase that covers auto accidents extremely well says that they are a giant pain in the butt. I bet I don’t get any arguments.

The funny thing about accidents according to the National Highway Traffic Safety Administration report of 2008 (latest edition available) is they occur at speeds between 35-40 mph and between the hours of 3:00 p.m.- 6:00 p.m. They also happen within 10 miles of home.

If this information sounds like a person returning home from work, commonly called drive home hours, and almost home, it is. These statistics aren’t that surprising given they happen in one of the busiest times of the day.

They do illustrate the need to drive carefully whether you are returning home from work or just performing your daily errand running routine. They also illustrate one other very important point. The need to have adequate coverage on both your vehicle and yourself.

It only takes a half hour in most cases to receive a complete auto insurance review. This half hour may be the best half hour you’ll ever spend. After all, you don’t want to be caught being underinsured given what the statistics tell us about accidents.

And on the other side of the coin, don’t ever get ripped off on an auto insurance claim again. Make sure you know what the lawyers and the insurance companies know. Don’t let the insurance companies and their slimy lawyers get any more of your money. And the best part is you can represent yourself. That means you get to keep all the fees the lawyer would normally collect. More money in your pocket and the knowledge to get what is rightfully yours with no games from the insurance company? Read more about: Representing Yourself

Assigned risk plans are probably best know in the auto insurance market because they exist in every state. An assigned risk plan allows drivers to obtain auto insurance if they are unable to buy it in what is called the regular, or voluntary, market. Generally when you can’t acquire insurance in the voluntary market, you’re known as a high risk driver. That’s when assigned risk comes in.

Your state’s assigned risk plan is made up of all the insurers selling auto insurance in your state. It is that simple. They are assigned drivers to insure based on a formula that consists of the amount of insurance they sell in the regular market along with other company related factors.

This market is also called the residual market. The residual market has another component referred to as FAIR Plans. Regardless of what they are called, they exist to provide coverage for those who cannot get it in the regular market.

FAIR Plan is the acronym for Fair Access To Insurance Requirements Plans. While all states have assigned risk plans, not all states have a FAIR Plan. A FAIR Plan insures fire, vandalism, riot and windstorm losses along with homeowners insurance that includes liability.

A FAIR Plan is actually an insurance pool that sells property insurance to people in a high risk situation. They also don’t have any control over that associated risk. As you might expect, plans vary by state. However, the one common denominator in all plans is that property insurers licensed in that state are required to participate in the FAIR Plan.