Auto insurance is a type of insurance that covers losses or damages on cars, trucks, and SUVs due to accidents or theft.  Thousands of cars get stolen every year, and the number is even higher for the amount of vehicular accidents that occur on an annual basis.  Read on to see what types of auto insurance coverage is available, and which plan will best suit your needs.

Insurance coverage for your vehicle not only covers damages to your car, truck or SUV in the case of an accident or theft, but it also protects the people in the car at the time of the incident.  Typically, a standard auto insurance policy covers:

• Bodily injury liability - protects against injuries or death while operating your vehicle.
• Medical payments - pays medical expenses of the driver and all people involved in the accident.
• Uninsured motorists - covers expenses of injuries and damages if you car is struck by another driver that does not have insurance of their own.
• Collision coverage - pays for damages for the value of your car if you hit or you are hit by another vehicle.
• Comprehensive physical damage -  coverages damages or loss of non-collision related incidents.
• Property damage liability - covers any damage your car has on another person's property.
• Rental reimbursement - covers payment of a rental car while your vehicle is being repaired due to an incident covered by your auto insurance.

With all standard auto insurance policies, there are various types of coverage options based on what best fits your needs.  Each option, however, will have different limits of coverage.  Click here to see what coverage option is best for you.

GAP Insurance

Another important type of auto-related insurance is called Guaranteed Asset Protection, commonly known as GAP insurance. GAP insurance is a type of coverage that comes in handy in the event that your car becomes completely destroyed or stolen, when you owe more money on your car than the vehicle is valued.  In a nutshell, GAP insurance covers the difference between what your car is worth (the book value) and what you still owe on it.

In many cases, the difference between what you owe and what your vehicle is worth is thousands of dollars.  The higher the outstanding balance on your loan, the more you can benefit from this insurance.  For instance, if your car is worth $15,000 and you owe $17,000 on your auto loan, GAP insurance will cover the remaining $2,000 in which you would still be responsible.