Auto Insurance Coverage Types

What auto insurance coverage types are available for drivers? Insurance companies offer a range of products: some of them protect the other driver and the occupants of his or her vehicle, while others protect the driver’s own vehicle.

Liability coverage is purchased to protect the occupants of the other vehicle when an accident occurs. Bodily injury liability coverage pays for medical bills, rehabilitation expenses and lost wages of accident victims. Property damage liability coverage is used to pay for repairs to the other driver’s vehicle and public property damaged in the accident.

In some states, uninsured and underinsured motorist coverage is required by law. Uninsured motorist coverage comes into play when the at-fault driver in an accident doesn’t have insurance coverage. Underinsured motorist coverage tops up the difference between the liability coverage the at-fault driver has available and the actual amount of damages being claimed.

Personal Injury Protection (PIP) coverage is required in no-fault states. It protects the policyholder and passengers riding in the vehicle and pays for medical bills and rehabilitation expenses, up to the limit the customer has chosen.

Collision and comprehensive coverage protect the policyholder’s own vehicle against physical damage and other types of losses. Collision coverage pays for repairs caused by an accident which involved striking another vehicle or a stationary object. Comprehensive coverage protects the vehicle owner against losses caused by other events, including hail, flooding, fire, vandalism and theft.