Automobile Insurance Policy Coverage
Determining what type of coverage to get on your auto insurance policy can be a daunting task. The damages from an auto accident can be quite varied: your car can get damaged, you could damage someone else’s car, you could get hurt, or your passengers can get hurt. So what kind of coverage is right for you? Below, we’ve provided a list of definitions of common auto insurance policy coverage categories to help you make smart decisions next time you’re shopping for auto insurance.
- Bodily Injury Liability. This describes what the insurance company (insurer) will pay when other persons are injured or killed in an accident for which you (the insured) are at fault. This money is intended to cover medical expenses and any damages a deceased person’s family may claim.
- Personal Injury Protection (PIP). With this coverage, the insurer will pay for the insured's injuries and other related damages to the insured and to passengers in the insured’s vehicle.
- Property Damage Liability. The insurer will pay damages when the property of other persons has been harmed or destroyed by the insured's vehicle and the insured is at fault. This provision is not always limited to cars. For example, if you ran your car into a mailbox, this provision might cover the cost of replacing the mailbox.
- Collision Coverage. The insurer will pay for damages to the insured's own vehicle, when the insured is at fault. If the insured's vehicle is financed, the loaner may require the insured to maintain collision coverage on the vehicle.
- Comprehensive Coverage. The insurer will pay for damages to the insured's automobile caused by fire, theft, vandalism, riots, and other random destructive acts. If a tree branch falls on your parked car, this provision will pay for repairs to the car. Just like collision coverage, many financers require comprehensive coverage on cars that aren’t paid off yet.
- Uninsured/Underinsured Motorist (UM/UIM) Coverage. The insurer will pay for injury or death to the insured and the insured's passengers if caused by another driver who doesn’t have insurance (uninsured), whose insurance company pays too little (underinsured), or whose identity is unknown (as in a hit-and-run motorist). In some states, the insurer will also pay for damage to the insured's vehicle.
Take a look at FindLaw’s sections on car accidents and litigation to learn about related topics.