Your auto insurance coverage protects you in a number of ways. Liability coverage is part of a standard car insurance policy and it is put in place to pay for personal injuries and property damage caused by the policyholder in an at-fault accident. Instead of covering the policyholder personally, this part of the policy compensates the driver of the other vehicle and his or her passengers. It pays for damages up to the policy limit the customer has chosen.
The policy may also include physical damage coverage. Collision insurance pays for damage caused during an accident which involves striking an inanimate object or in a rollover. Comprehensive insurance protection protects the policyholder’s vehicle from damage caused by flooding, severe weather and fire. This part of the policy also pays out if the car is stolen and not recovered.
Uninsured motorist coverage is another type of protection available to drivers. It pays for injuries and property damage following an accident where the at-fault driver does not have insurance or cannot be identified, such as in the case of a hit and run accident.
Underinsured motorist coverage is also available to car insurance buyers. This type of protection comes into play when the at-fault driver has insurance but the level of available protection is not high enough to pay for the damages caused in an accident. The at-fault driver’s insurance coverage is used up to its policy limit and the underinsured motorist coverage is used to pay the balance of the damages owing.