If you’re buying a new car or shopping for auto insurance, you’ll likely need to understand the common types of coverage available on a car insurance policy. The various types of car insurance coverage are available to help protect you, your passengers, and your vehicle if you’re involved in a car accident.
Six common car insurance coverage options are auto liability coverage, uninsured and underinsured motorist coverage, comprehensive coverage, collision coverage, medical payments coverage, and personal injury protection. Depending on where you live, some of these coverages are mandatory and some are optional.
*Bodily injury liability may help pay for costs related to another person’s injuries if you cause an accident.
*Property damage liability may help pay for damage you cause to another person’s property while driving.
UNINSURED AND UNDERINSURED MOTORIST COVERAGE
If you’re hit by a driver who doesn’t have insurance, uninsured motorist coverage may help pay for your medical bills or, in some states, repairs to your vehicle. If you’re hit by an underinsured driver, that means they have car insurance but their liability limits aren’t enough to cover your resulting medical bills. That’s where underinsured motorist coverage may help
Comprehensive may help cover damage to your car from things like theft, fire, hail or vandalism. If your car is damaged by a covered peril, comprehensive coverage may help pay to repair or replace your vehicle (up to the vehicle’s actual cash value). This coverage has a deductible, which is the amount you’ll pay out of pocket before your insurer reimburses you for a covered claim.
If you’re involved in an accident with another vehicle, or if you hit an object such as a fence, collision coverage may help pay to repair or replace your car (up to its actual cash value and minus your deductible).
MEDICAL PAYMENTS COVERAGE
If you, your passengers, or family members who are driving the insured vehicle are injured in an accident, medical payments coverage may help pay for costs associated with the injuries. Covered costs may include hospital visits, surgery, X-rays, and more.
PERSONAL INJURY PROTECTION
Personal injury protection, or PIP, is only available in some states. Like medical payments coverage, PIP may help pay for your medical expenses after an accident. In addition, PIP may also help cover other expenses incurred because of your injuries — for example, child care expenses or lost income.
OTHER TYPES OF AUTO INSURANCE COVERAGE
You may be able to add the following optional coverages to your car insurance policy, depending on your situation. Your insurance agent can help you understand what each helps cover, so you can put together a policy that’s right for you.
- Rental reimbursement coverage/transportation expense coverage
- Gap coverage
- New car replacement coverage
- Towing and labor cost coverage
- Ride-sharing coverage
- Sound system coverage
- Classic car insurance