What is the Difference Between Basic and Standard Car Insurance Coverage?

Standard car insurance is the most basic or lowest level of coverage provided by an insurance provider. Most states' regulations require drivers to have liability insurance and will determine the exact dollar value of the coverage needed. Liability insurance will cover claims for bodily injury and property damage that result from an accident that is primarily the fault of the insured person. This type of policy only pays for injuries and damages suffered by other people for whom you are responsible.

On the other hand, full-coverage policies cover both your liability and property damage to your own vehicle. Basic car insurance is a policy that only includes liability coverage. It helps cover damage it may cause to other people and their property, such as medical bills, the repair or replacement of property, and legal consequences. Nearly every state has basic minimum car insurance limits for their drivers. When you take out car insurance, your insurer will offer you these limits by default, but you should consider higher limits for financial security reasons.

The basic policy offers less protection, but at a lower cost than the standard auto insurance policy. The Personal Injury Protection (PIP) covers your own medical expenses, as well as lost wages and rehabilitation costs that may arise due to a car accident. In the three options above, you still have to prove your financial responsibility in the event of a car accident. However, new cars are often more expensive to insure, so their prices are likely to be higher than that. In the case of car insurance, the insurer will consider the age, gender, marital status, driving history, accident history, type of vehicle, use of the car, credit history and location of the driver. Full coverage is required for a car loan or lease and covers damage you cause to other people, in addition to repairs to your own vehicle.

This coverage covers the treatment of injuries to the driver and passengers of the policyholder's car. If your car is leased or financed, the bank or car dealer may require you to purchase a full coverage policy. An auto insurance company will rate drivers based on different categories of risk, such as age, gender, and credit history. While these two types of insurance are often sold together as full-coverage auto insurance, they cover different situations. Another benefit you get from standard car insurance is that it's cheaper to pay a premium compared to non-standard car insurance.

The Auto Insurance Cost Reduction Act required that all drivers have a basic policy available. Even if you are at fault for the accident, your collision coverage will reimburse you for the repair costs of your vehicle, minus the deductible. Comprehensive coverage covers damage to a consumer's car caused by causes other than a collision, such as damage caused by a tornado, vandalism, a garage collapse, or dents caused by an encounter with a deer.

Gertraude Jackel
Gertraude Jackel

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