First, let’s look at the typical auto policy. It is not just one kind of insurance, but six different coverage’s all rolled into one policy. Here is a quick overview of the six kinds of coverage in an auto insurance policy. Please understand that what follows here is not legal definitions of any policy. Also, it is not a substitute for reading and understanding your own policy.
- Bodily Injury Liability — It pays the medical and other expenses of those people injured or even killed in accidents you cause.
- Property Damage Liability — It covers the damage your car causes to property. Usually, that’s the other car or cars involved in the accident, but it also covers damage you do to any object you hit. Garages, buildings, lampposts, fences, whatever.
- Collision — This is for damage done to your car when it collides with other vehicles or other objects.
- Comprehensive — This covers damage to your car that results from something other than a collision with another vehicle. As examples, damages caused by vandals or a wind-blown tree hitting your car. It also includes coverage for theft.
- Medical Payments — It pays medical, and even funeral expenses, for you as well as members of your family and passengers in your car if it is involved in a collision, regardless of who caused the accident. It also covers you as a pedestrian if a vehicle hits you.
Uninsured/Underinsured Motorist — This pays for injuries to you and damage to your car if you are hit by a driver who doesn’t have insurance — or by someone who doesn’t have enough insurance to cover your losses. In most states, more than 10% of motorist don’t have nay insurance. In some states, as many as three in 10 drivers don’t have coverage. Many of those who do have insurance don’t have enough to cover the damages and injuries that would result in a major collision.