What Does Car Insurance Cover?
A single car insurance policy can include several types of coverage. To decide what to buy, it’s important to research the options available, which types of coverage are required and how different forms of coverage work.
Keep in mind that your policy covers you, the licensed members of your household who are listed on the policy, and usually anyone else you give permission to drive the car.
Meeting your state’s car insurance requirements
Almost every state requires you to carry a minimum amount of auto insurance to cover the cost of damage or injuries caused by your car in accidents.
The minimum car insurance requirements vary by state. Here are types of coverage that may be required where you live:
Personal injury protection or medical payments
Uninsured or underinsured motorist coverage
Liability insurance pays for damage and injuries you cause others in accidents. All states except New Hampshire require minimum amounts of liability coverage. Bodily injury liability pays the medical expenses of others who are injured; property damage liability pays to repair or replace their cars or other damaged property.
The amount of liability coverage is usually expressed as three numbers, such as 100/300/50. Here’s how to translate that:
$100,000 bodily injury per person
$300,000 bodily injury per accident
$50,000 property damage per accident.
Your car insurance will pay up to the limits on the policy. You’re on the hook for expenses that exceed those limits.
Personal injury protection or medical payments insurance
Liability insurance pays out to other people. For your own medical costs, you might consider personal injury protection (PIP) or medical payments coverage (MedPay), which may be available as part of your car insurance quotes. These pay any medical bills you or your passengers may incur if you’re injured in an accident. They can also pay for funeral costs.
One or the other is required in 16 states, but coverage works a little differently in each state. PIP can also cover lost wages and the cost to replace services normally performed by the injured person. MedPay is usually sold in smaller amounts than PIP. See more