What Does Car Insurance Cover?

It depends on your state, your car insurance company and the coverage options you choose. Since bodily injury and property damage liability insurance is required in most states, at a minimum your policy should cover vehicle and property damage, injury-related expenses and legal fees for other people involved in an accident you cause, up to the state-mandated policy limits.

Car insurance is meant to prevent you from having to pay full repair expenses or medical bills after an accident. Most states require a minimum amount of liability insurance, but insurers can offer several other types of auto insurance. To decide which car insurance policy you need, research what is required in your state and what will best protect your finances.

Although different states have different regulations on auto insurance, most basic auto insurance includes six types of insurance. Here is everything you need to know.

Comprehensive

This insurance can compensate you for losses caused by theft or damage caused by other reasons than a collision with another car or object. Comprehensive coverage of events such as fires, falling objects, missiles, explosions, earthquakes, storms, hail, floods, vandalism, riots, or contact with animals such as birds or deer. If the windshield is cracked or broken, the windshield also needs to be repaired.

Comprehensive insurance is usually sold with a separate deductible, although some insurance companies may offer glass parts of insurance coverage without a deductible.

Collision

Collision insurance compensates for car damage caused by collision with another car, object (such as a tree or telephone pole) or rollover (please note that a collision with a deer is a comprehensive insurance). It also includes damage caused by potholes.

Collision insurance is usually sold with a separate deductible. Even if you are at fault for the accident, your collision insurance will cover the cost of repairing your car, minus the deductible. If you are not at fault, your insurance company may try to recover the amount paid to you by other drivers' insurance companies, and if they succeed, you will also be reimbursed for the deductible.

Bodily injury liability

Personal injury liability insurance is applicable to injuries caused to others by you, the designated driver or the policy holder. When driving another person’s car with the permission of another person, you and your family members listed on the insurance policy are also covered.

It is very important to have adequate liability insurance, because if you are involved in a serious accident, you may be sued for huge compensation. It is recommended that policyholders purchase a minimum liability insurance that exceeds the national requirements, which is sufficient to protect your assets such as houses and savings.

Property damage liability

This insurance indemnifies you (or the person who drives the car with your permission) for damage that may be caused to the property of others. Usually, this means damage to other people’s cars, but it also includes damage to lamp posts, utility poles, fences, buildings, or other structures that your car hits.

Property damage liability

This insurance indemnifies you (or the person who drives the car with your permission) for damage that may be caused to the property of others. Usually, this means damage to other people’s cars, but it also includes damage to lamp posts, utility poles, fences, buildings, or other structures that your car hits.

Medical payments or personal injury protection (PIP)

The insurance pays for the treatment of injuries to the driver and passengers of the policyholder’s car. In the widest range, PIP can cover medical expenses, lost wages, and the cost of replacing services usually provided by people injured in car accidents. It can also pay for funeral expenses.

Additional coverage options

You can choose from a variety of additional options, which usually don’t cost too much to add to the policy, but can come in handy in emergency situations. You need to purchase collision and compositing to be eligible to purchase most additional features, such as:

After the insurance claim is repaired, the rental reimbursement will pay for the rental car while your car is in the store.

If you experience a breakdown and need to replace the battery, replace a flat tire, or tow your car to a repair shop, roadside assistance or tow and labor insurance can help.

New car replacement insurance works similarly to gap insurance. If your car is lost due to an accident, you will pay the value of the new car. Most insurance companies only provide one or the other type of insurance.

All-glass insurance covers the cost of repairing or replacing broken or broken window glass, and there is no deductible.

Carpool insurance will protect you when you drive for ridesharing services such as Uber or Lyft.

Once you have determined the underwriting options you want, it is important to shop around and compare car insurance rates. Compare the car insurance of several companies, at least three, to help you get the most out of any insurance you choose.