Liability
Liability car insurance covers damages to another person resulting from an accident you cause. One of the most basic types of auto insurance coverage, liability is also one of the few coverage options that's mandatory in every state—though minimum limits of coverage vary, depending on where you live.
Bodily Injury Liability
It provides coverage in case you cause an accident in which another person (or people) is hurt. It covers the damages that you're legally responsible for, and provides a legal defense if someone sues you for damages.
Property Damage Liability
If you ever cause an accident, your Property Damage Liability coverage will pay for the damage done to anyone else's property, whether it's another vehicle, a lamppost, or even a house, up to the selected amount. As part of your Liability Insurance, Property Damage coverage also pays for your legal defense costs if you are sued as a result of these damages.
Personal Injury Protection (PIP)
PIP stands for personal insurance protection, and it is an extension of car insurance that covers medical expenses and, in many cases, lost wages. It is often called “no-fault” coverage because its inherent comprehensiveness pays out claims agnostic of who is at fault in the accident.
Collision Coverage
It covers damage to your car in a variety of situations. If you hit another car - the damage to your car would be covered by this part of your policy. For example, if you hydroplane on a wet road and hit a tree, damaging your front bumper, Collision coverage would take care of the repair costs - less your deductible.
Comprehensive Coverage
Comprehensive auto insurance covers damage caused by incidents other than a car accident, including theft, fire, vandalism, weather, falling objects and animal damage. It isn't required by law, but it may be a good idea depending on the value of the car you're driving. In fact, drivers of leased or financed cars are often required to obtain this insurance in order to protect the car owner or lender's investment.
Uninsured / Underinsured Motorist
If your car is hit in an accident and it’s the other driver’s fault, it’s easy to assume that person’s car insurance will pay for the damage. Unfortunately, it’s not always that simple. Although it’s illegal in most states, some people drive without insurance. Roughly 16% of drivers are uninsured, according to the Insurance Research Council. If one of them hits you, you could be stuck paying for the repairs to your car even if it wasn’t your fault
Posted Sunday, January 25 2015 10:08 AM
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