Types of Auto Insurance Coverage

  Car Insurance Glossary

Understanding what different types of auto insurance coverage mean and knowing which types and levels are required is essential for low cost insurance that meets Your needs.

- Standard Liability Insurance Coverage
  - Bodily Injury Liability
  - Property Damage Liability Coverage

- Collision Insurance
- Comprehensive Insurance
- Medical Payments Coverage (Med-Pay)
- Personal Injury Protection (PIP)
- Uninsured Motorist Coverage
- Underinsured Motorist Coverage

- Endorsement Coverage
  - Daily Car Rental Reimbursement
  - Towing and Labor
  - Auto Replacement

Standard Liability Coverage

Or Basic liability coverage is required in almost all states, and is the most important type of coverage. It's made up of two policies:

Bodily Injury Liability - protects you from claims made against you which you are obligated to pay if you cause bodily injury to person in a crash. The costs of injuries, medical treatment, suffering and lost wages may be significant, so You may consider carrying more than required minimum.

Property Damage Liability - covers You for the amount of property damage You've caused in a crash.

Liability insurance minimums are usually stipulated as three numbers such as, 20/40/15.
What does it mean?
- First number : amount limiting payments to a single person per accident.
- Second number : maximum payment for all injured persons per accident.
- Third number : property damage liability maximum for one accident.

Collision Coverage

Covers damages to your vehicle by collision with another vehicle or fixed objects, regardless of who is at fault. This type of insurance is optional (except if Your vehicle is financed). Dropping collision coverage for old car is an option if You want to save on auto insurance.

Comprehensive Coverage

Another optional insurance that covers damage to Your vehicle for anything else: fire, weather, natural disasters, vandalism, auto-theft, e.t.c.
If You're not dropping comprehensive coverage in order to lower auto insurance, consider picking higher deductibles.

Medical Payments Coverage (Med-Pay)

Covers medical expenses from your crash injuries and covered persons in your car, no matter who was at fault. Read our Affordable auto insurance tips to learn how to save on this and other types of insurance.

Personal Injury Protection (PIP)

Or No Fault insurance. Pays for medical and rehabilitative expenses, compensation for loss of services, funeral expenses and replacement services incurred by you, members of your family, passengers in your vehicle, and pedestrians injured by your vehicle as a result of an accident, regardless of who was at fault for the accident.
Basically, You file a claim to your insurer, You don't go for another driverinvolved in an accident.
No fault insurance is available in DC, FL, HI, KS, KY, Mass, MI, MN, NJ, NY, ND, PA and UT. Check auto insurance law requirements for all states.

Uninsured Motorist Coverage

Protects You from uninsured drivers. It pays damages for bodily injury or death caused by an uninsured or hit-and-run driver who is legally responsible for the accident.

This type of insurance combined with Underinsured Motorist Coverage is important and we recommend You allways add those two as a part of Your policy! There are many drivers without auto insurance coverage, and if one of them causes accident, without Uninsured/Underinsured Motorist Coverage You will not be reimbursed.
(Required or not available in some states)

Underinsured Motorist Coverage

Pays damages if You are injured in an accident caused by insured driver whose liability insurance limit is insufficient to cover the losses incurred.
Very similar to Uninsured motorist coverage insurance.

Endorsement Coverage

Set of many small optional coverages, such as:

Towing and Labor Coverage - pays Your expense ups to have your vehicle towed or for roadside labor to repair your auto if it's disabled on the road.

Daily Car Rental Reimbursement - covers expenses that you may incur following an auto accident. While your car is being repaired, You may need to rent a vehicle, and you'll get flat sum to cover it at some companies.

Auto Replacement - guarantees Your car will be fully repaired (or even replaced) even if these costs exceed it's value.

Free auto insurance quote online:

- Free auto insurance rates at InsureMe.
- Low cost auto insurance at 21st Century Auto Insurance.
- Auto insurance Canada at Kanetix, for Canada residents.
- Car insurance rate at NetQuote.
- Auto insurance quote online at 4Insurance.
- Auto Insurance from InsWeb.
- Instant Auto Insurance Quotes from top companies at Insurance.com.