What Are the Different Types of Coverages for Your Vehicle?
Auto insurance is necessary for protecting you against financial loss if you cause or sustain physical injuries or for any damages to your vehicle. Most states also require drivers to maintain auto insurance to register or legally operate a vehicle. Auto insurance coverages vary by company; however, several types of coverage are available through most car insurers.
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Liability
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Liability coverage covers property damage and injuries sustained by other drivers and their passengers if you cause a traffic accident. It does not pay for your injuries or damage to your car. Auto insurance companies commonly sell liability coverage with split limits; for example, it may provide $100,000 for injuries caused to one person and $300,000 for injuries to two or more people in a single accident, as well as $100,000 for property damage resulting from a single accident. Some companies also provide combined single limit liability; for example, $300,000 to cover all injuries and property damage, regardless of the number of people involved in an accident.
Uninsured Motorist
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Although auto insurance is mandatory in most states, some drivers choose to ignore their state's insurance requirements. If an uninsured driver causes an accident, uninsured motorist coverage pays for your injuries and property damage. In most cases, the insurance company seeks recovery from the at-fault driver after paying you under uninsured motorist coverage. Car insurance companies may sell uninsured motorist coverage with split limits or a combined single limit.
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Physical Damage
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Physical damage pays for damage to your car, as well as personal property inside your car, regardless of who causes an accident. It also pays for property damage caused by theft, vandalism, weather, fire and collision with an animal or stationary object. Auto insurance companies typically sell physical damage coverage with a deductible, which is the portion of the loss that you must pay. Deductibles commonly range from $100 to $1,000 -- lower deductibles result in higher premiums for this coverage.
Medical Payments
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Medical payments coverage provides a limited benefit, typically $5,000 or less, to pay for emergency room, hospital or rehabilitative expenses you incur as a result of injuries caused by a motor vehicle accident. This coverage applies regardless of who is at fault in an accident. Medical payments coverage functions to supplement health insurance, not to replace it.
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