While different states in the USA have different mandates for auto insurance Policies, most car insurance policies offer six types of Auto coverage.
Here’s what you should know about what is and is not covered by each insurance policy.
There are several options for insurance Policies available, from the most basic auto policies consisting of:
bodily injury liability, personal injury protection, property damage liability, collision, comprehensive and uninsured/underinsured motorist.
Note: Each type of insurance policy is priced very differently, so there are different policy limits and pricing.
Bodily injury liability Insurance
Bodily injury liability coverage applies to injuries that you, the designated driver or policyholder, cause to someone else.
You and family members listed on the policy are also covered when driving someone else’s car with their permission.
It’s extremely important to have enough liability insurance, because if you are involved in a serious accident, you may get sued.
It’s recommended that you purchase more than the state-required minimum liability insurance, it will protect your home and your savings.
Medical payments or personal injury protection or (PIP)
This type of auto insurance coverage pays for the injuries to the driver and passengers of the policyholder’s car.
PIP could cover medical payments, lost wages, and the cost of services normally performed by someone injured in an auto accident.
It may also cover funeral costs if there happens to be a death.
Property damage liability Insurance
This type of coverage will pay for damages you (or someone driving the car) may cause to someone else’s property.
This means damage to someone else’s car, but it also includes damage to property or other things your car may have damaged.
Collision Insurance
The collision insurance coverage pays for damage to your car resulting from a collision with another car or object, such as a tree or telephone pole, or as a result of flipping over (note that collisions with animals are covered under comprehensive insurance policies). It also covers bad roads that may result in damage to your car.
Collision insurance coverage is generally sold with a separate deductible.
Even if it’s your fault, your collision coverage will normally reimburse you for the costs of car repairs, minus a deductible.
If you’re not at fault, your insurance company may try to recover the amount they paid you from the other driver’s insurance company and, if they are successful, you’ll also be reimbursed for the deductible.
Comprehensive Insurance
This type of insurance coverage reimburses you for loss due to theft or damage caused by something other than a collision with another car or object.
Comprehensive Auto insurance covers events such as fire, falling objects, explosions, earthquakes, windstorms, hail, floods, vandalism, riots, or accidents with animals.
It will also pay to repair your windshield if it is cracked or smashed.
Comprehensive insurance policies are usually sold with a separate deductible, although some insurers may offer to replace the glass through the coverage without a deductible.
Uninsured and underinsured motorist coverage
Underinsured motorist coverage reimburses you, a member of your family, or a designated driver if one of you is hit by an uninsured driver or a driver who doesn’t have the correct insurance to pay for your damages.
This coverage also offers protection in the event a covered driver is the victim of a hit-and-run or if, as a pedestrian, you are hit by an uninsured or underinsured motorist.
