Car insurance can help you cover expenses in the event of an accident, including medical bills and repairs. However, the coverage you get depends on the type of car insurance you have. The following are the most common forms of car insurance; this includes coverage that is mandatory and optional insurance.
Most common types of car insurance
Liability insurance
If you cause a car accident, liability insurance covers the cost of damages and injuries to the other driver. Liability insurance is required in all states except New Hampshire and Virginia. There are two types of liability insurance: bodily injury liability and property damage liability.
Liability for bodily injury: In the event that you cause a car accident, bodily injury liability insurance is used to cover the other party’s medical expenses.
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Liability for property damage: If you are at fault for an accident, property damage liability insurance will cover the costs of repairing the other party’s property, such as their car, fence or mailbox.
Uninsured/underinsured motorist coverage
In some states, uninsured and/or underinsured motorist coverage is required. This type of insurance covers any expenses incurred in the event of another driver hitting you, and there are four different types of coverage that could be required.
Bodily injuries not insured: This covers your medical expenses if you are in an accident and the at-fault driver is uninsured.
Insufficient bodily harm: This covers your medical expenses if you are in an accident and the at-fault driver’s insurance is not enough to cover your general expenses.
Property damage to uninsured motorists: This type of insurance pays for necessary repairs if you have an accident and the at-fault driver is uninsured.
Uninsured motorist property damage: If an at-fault driver’s property damage liability insurance isn’t enough to cover the costs of repairing your vehicle, this type of insurance will cover any expenses not covered.
Collision and comprehensive insurance
Collision insurance and comprehensive insurance are optional in all states, but are usually required by lenders if you’re financing or leasing your vehicle.
Collision insurance: Regardless of who is at fault in an accident, collision coverage will pay for damages to your vehicle. It will also cover any damage to your vehicle if you are involved in a single-car accident. Collision insurance covers up to the actual cash value of your vehicle and carries a deductible.
Comprehensive insurance: Comprehensive insurance covers your vehicle in the event of theft or damage from anything other than a car accident, such as vandalism or flooding.
Personal injury coverage and medical payments
Coverage for personal injury protection and medical payments is required by law in all 12 no-fault states*.
Medical payment coverage: This type of insurance helps cover medical bills for you and your passengers in the event of an accident, regardless of who was at fault. If you find yourself as a pedestrian, this insurance will also help you cover medical expenses in this case.
Protection against personal injury: Personal injury protection also helps cover medical bills for you and your passengers in the event of an accident, regardless of who was at fault. It can also cover other necessary expenses, such as child care, lost wages and funeral expenses.
*12 no-fault states: Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Pennsylvania, and Utah.
Gap insurance
Gap insurance can be beneficial for those who are still paying off or leasing a new vehicle, as it will cover the difference between the car’s value and the amount you still owe if your car is totaled. If you’re renting a car, you’ll probably need to carry gap insurance.
