What Types of Car Insurance Are There?

There are many types of car insurance and understanding which one you need can be confusing. Most states require certain types of coverage – liability coverage, for example – but don’t require other types, though you can purchase optional policies should you choose to.

Liability

Liability coverage covers you for the damage you cause to others in an accident. It’s comprised of bodily injury coverage and property damage coverage. It’s almost always required.

Bodily Injury

This is one part of liability coverage. It covers the bodily injury you cause to others in an accident. There are two components to this coverage: the limit of the cost of injury coverage per person and the limit of the total amount of injury coverage.

Property Damage

This is the second part of liability coverage. It covers you for the damage you cause to the other party’s property in an accident.

Personal Injury Protection

Personal injury protection may be required in no-fault states. It covers medical bills, lost income, lost services, among other things.

Uninsured Motorist

This covers you if you are in an accident caused by another driver who doesn’t have insurance. It pays to cover your medical expenses if you are injured by an uninsured driver. It is not required everywhere.

Underinsured Motorist

This covers you if you are in an accident caused by another driver who doesn’t have enough insurance to cover all your expenses. It’s sometimes combined with uninsured motorist coverage and may be required in some states.

Optional Types of Car Insurance

Collision and comprehensive coverage are optional. Collision coverage will pay for you to repair or replace your car if it’s damaged in an accident that you caused. Comprehensive coverage will pay for you to repair or replace your car if it’s damaged in ways other than an accident. Policies differ by insurance company, but many cover vandalism, theft, hit-and-run damage, flood, fire, or other “acts of God.”