Types of Car Insurance

Bodily injury liability coverage

Bodily injury liability insurance protects you and family members listed on the policy against the claims of other people who are injured in an accident for which you or family member is ruled at fault. The bodily injury coverage may include claims for medical expenses, lost wages and pain and suffering. Your bodily injury liability coverage would pay these costs and the cost of defending you against their claims.

Property Damage Liability coverage

Property Damage liability insurance pays for any damage you cause to the property of others. This includes not only damages to other vehicles, but also damages to traffic lights, lamp posts, fences, buildings or other structures hit in an accident.

Below is an example of the minimum limits of liability insurance required under a State law:
Bodily Injury Liability – $25,000 per person and $50,000 per incident
Property Damage Liability – $25,000 per incident

Is it required: Yes, Liability insurance is required by law in most States in order to operate a motor vehicle on public roads and highways.

Although most States requires all drivers to have Liability Insurance to operate a motor vehicle on public roads and highways, unfortunately there are some drivers who do not follow the law and do not carry liability insurance.

Uninsured motorists coverage protects you, the policyholder, a member of the family or a designated driver in the event one of them are injured by a hit-and-run driver or a driver who does not have auto insurance. Also as a pedestrian, if a policyholder is hit by an uninsured driver, this coverage will also protect the policyholder.

Is it required: Yes, this coverage is required by law.

Collision coverage pays for physical damage to the policyholder’s car resulting from a collision with another car, an object, such as a tree or as a result of flipping over.

Collision insurance will cover damage caused by the collision of your car, regardless of who is responsible for the accident, up to the limits of your policy. It will reimburse for the costs of repairing your car, minus the deductible if you are responsible for a car accident. If however you are not at fault, the insurance company may try to recover the amount it paid from the other driver’s insurance company, a process known as subrogation. If the company is successful in recovering the amount it paid, you will be reimbursed for your deductible.

Did you know.. Your Collision Insurance also covers damage caused by potholes.

Is it required: No, collision coverage is optional and not required by State law. However, If you have a car loan, your bank or finance company will require you to have collision insurance until a car loan is paid off.

Comprehensive insurance pays for damages to your car from almost all other causes, other than a collision with another car or object. This insures you from loss, if your car is damaged by fire, flood, vandalism, loss due to theft, glass breakage, explosion, windstorms, hail, flood, falling objects, or contact with animals such as deer.

Covered perils are listed in your policy under the insuring agreements section. As with collision insurance, comprehensive insurance has a deductible, such as a $500 deductible, a $1000 deductible, or more. The deductible is the amount of any loss you must pay before the insurance company will cover damages. Your state law does not require you to purchase Comprehensive Insurance. However, if you financed or leased your vehicle, the lender or leasing company usually requires it.

Is it required: No, comprehensive coverage is optional and not required by State law. However, lenders may insist borrowers carry it until a car loan is paid off. It may also be a requirement of some dealerships if a car is leased.

In an accident, Medical payments coverage (MedPay) pays for the treatment of injuries to the driver and passengers of the policyholder’s car, no matter who is at fault. It also protects you as a pedestrian. Coverages vary by state, so be sure to check with your agent to verify what your policy covers.

Personal Injury Protection (PIP)

Some states offer Personal Injury Protection (PIP) in place of, or in addition to, medical payments coverage. Also known as “no-fault” insurance.

Personal injury protection may cover additional expenses related to injuries sustained in an accident, such as:
Medical expenses
Funeral expenses
Lost wages/income
Cost of replacing services normally performed by someone injured in an auto accident

Is it required: Yes, this coverage is required by law.