Coverages in a car insurance policy
Six common car insurance coverage options are:
In addition to comprehensive and collision coverage, uninsured and underinsured motorist coverage, medical payments coverage, and personal injury protection are all included. There are mandatory and optional health coverage options available depending on where you live. You can choose the right coverage for your needs if you know what your state requires and what each helps cover.
1. LIABILITY COVERAGE
Most states require that all vehicles have liability coverage. State law requires drivers to purchase liability insurance at least to the minimum permitted by the state. Among the components of liability insurance are:
- Personal injury insurance can cover the costs of an accident that caused injury to another person.
- Damage to property You may be able to get reimbursement for property damage caused to another person while driving.
2. The Underinsured and Uninsured Motorist coverage
Having uninsured motorist coverage may help you pay medical bills if you’re hit by a driver without insurance, as well as repair costs in some states. A driver with underinsured coverage has car insurance, but their liability limits are not high enough to pay for the damages they cause. This is where underinsurance comes in.
Depending on the state, some states require uninsured/underinsured motorist coverage, while others allow it as an option.
3. COMPREHENSIVE COVERAGE
Car accident insurance may provide coverage for damage to your vehicle caused by theft, fire, hail, or vandalism. Under comprehensive coverage, your car may be repaired or replaced if it is damaged by a covered peril (up to its actual cash value). There is a deductible for this coverage, which is the amount that you will have to pay before your insurer will reimburse you for a covered claim. Unless your lender requires comprehensive coverage, leasing or paying off your car may not require you to have it.
4. COLLISION COVERAGE
You may be able to get parts or repairs for your car (up to its actual cash value and minus your deductible) if you have an accident with another vehicle or if you hit an object such as a fence. Most policies do not include collision coverage. If your vehicle’s leaseholder or lender requires it, though, you’ll need to provide that information.
5. MEDICAL PAYMENTS COVERAGE
As a result of an accident, medical payments coverage may help cover the costs related to your injuries or those of your passengers or family members who are driving the insured vehicle. Some costs may be covered by the plan, such as hospital stays, surgeries, and X-rays. State-based health insurance might be mandatory or optional.
6. PERSONAL INJURY PROTECTION
There are only a few states that offer personal injury protection. A PIP policy can cover medical expenses after a car accident, just like medical payments coverage. As well as covering medical expenses, PIP can help cover other expenses incurred as a result of your injuries – such as child care costs and lost wages. Other states where it is offered require personal injury protection, while others do not.