Auto Insurance Basics: Understanding Your Coverage

Types of Auto Insurance Coverage

Understanding your auto insurance policy is essential, especially after an accident. Here are the main types of coverage you should know about.

Liability Coverage

This is required in most states and covers damage you cause to others. It includes bodily injury liability and property damage liability. Your policy limits determine the maximum amount your insurance will pay.

Collision Coverage

This covers damage to your own vehicle resulting from a collision, regardless of fault. It typically has a deductible that you pay before coverage kicks in.

Comprehensive Coverage

This covers non-collision damage to your vehicle, such as theft, vandalism, natural disasters, and animal strikes.

Uninsured/Underinsured Motorist Coverage

This protects you if you're hit by a driver who has no insurance or insufficient insurance to cover your damages. This coverage is particularly important given the number of uninsured drivers on the road.

Personal Injury Protection (PIP)

Available in some states, PIP covers medical expenses and lost wages regardless of who caused the accident. It's sometimes called no-fault coverage.