Almost every driver in the country is required to carry car insurance by law. In the event of an accident, car insurance can protect you from financial devastation, help pay to repair your vehicle and even sometimes cover your medical expenses.
We’ve put together a handy guide to help you understand the common types of car insurance coverage available.
Bodily Injury Liability
In the event of an accident, if you are at fault, your bodily injury liability coverage covers all injuries to the other party, including their medical expenses, any lost wages as well as pain and suffering. The coverage will also extend to anyone else who is driving your car.
Property Damage Liability
This insurance covers any damage that you may cause to another person’s property as a result of an accident, typically covering vehicles as well as other items like fences, buildings, mailboxes, or lamp posts.
Uninsured and Underinsured Motorist Coverage
This type of coverage pays for your vehicle’s damages and your medical expenses if another driver hits you but doesn’t have any liability coverage or does not have enough to pay for all your damages.
Collision
If your vehicle ever gets damaged in a collision, this is the coverage that will pay for fixing the car, even covering damage from potholes. However, if you weren’t at fault for an accident causing damage to your car, the at-fault driver’s property damage liability coverage should ideally be paying for your repairs.
Comprehensive
Comprehensive coverage, sometimes called ‘other than collision coverage, pays for any certain types of damage unrelated to a collision.
Medical Payments Coverage (MPC)
This is the coverage for the treatment of injuries for you and any passengers present in your vehicle at the time of an accident. Medical payments coverage only pays for medical bills resulting from auto accidents.
Personal Injury Protection (PIP)
This insurance covers you and anyone present in your car for injuries, no matter who caused the accident.
Towing Coverage
This type of coverage is offered by many insurance providers and is almost always optional. It is also sometimes called roadside assistance coverage and pays for tows and service calls.
Rental Car Coverage
This coverage doesn’t automatically cover your rental car if you’re on vacation; instead, it pays for the cost of a replacement vehicle should your vehicle not be driveable due to a covered loss.