Types of Auto Policies
By law, all states require drivers to carry specific types and amounts of auto insurance, or to meet financial-responsibility laws. A driver should understand the different types of auto policies available to ensure he has appropriate coverage.
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Liability Policy
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A liability policy pays for damage to another vehicle or property when the policyholder is at fault. It pays the medical bills of injured persons in the other vehicle, up to the coverage limits. This policy does not provide coverage for your vehicle or medical bills.
Personal Injury Protection Policy
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Personal Injury Protection (PIP) pays the medical bills, lost earnings and funeral expenses for you and your passengers. PIP pays regardless of who is at fault.
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Comprehensive Policy
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A comprehensive policy pays for damage to your vehicle caused by vandalism, theft or weather-related incidents.
Collision
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After an auto accident, a collision policy will pay the repair bills for your vehicle.
Uninsured and Underinsured Motorists
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This type of policy will pay to repair your vehicle when a driver with no insurance or inadequate insurance is at fault in an accident. The policy may pay your medical bills that are related to the accident.
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