Comprehensive auto insurance normally includes liability coverage, collision coverage, and comprehensive coverage, with each type of coverage providing a different form of protection. Here are the details of each blanket.
Motor vehicle liability insurance covers injuries and property damage that you accidentally cause to others with your vehicle. For example, if you accidentally hit another car, injure the driver and damage their car, your liability insurance pays for their medical expenses and the cost of repairing their car, up to your policy limits. Liability insurance also covers court judgments or settlements and legal defense costs if you are sued for a car accident.
Liability auto insurance is displayed as three numbers, such as 50/100/50. These figures represent the maximum payment limit for each part of your liability coverage.
50/100/50 translates to:
- 50 refers to $50,000 of bodily injury liability per person injured in an accident.
- 100 refers to $100,000 total bodily injury liability for a car accident.
- 50 refers to $50,000 property damage liability per accident.
Your state will have a minimum amount of liability coverage that you must carry. Most state minimums are insufficient, especially if you cause a serious or multiple-car accident. It’s a good idea to buy higher limits, such as 100/300/100, to protect yourself and any assets that might be taken from you in a lawsuit.
Automobile liability insurance only covers those you cause damage to in a car accident. Liability insurance does not cover you, your passengers or your vehicle.
Collision and full coverage
Collision Coverage and Comprehensive Coverage are separate coverages, but are generally sold together.
Collision coverage. Pays to repair or replace your car if it collides with another vehicle or object, such as a fence or pole, regardless of fault. Collision insurance also pays for the rollover of your vehicle, such as accidentally rolling down an embankment.
Full coverage. Pays to repair or replace your car if it’s stolen or damaged due to fire, vandalism, flood, hail, animal impact, extreme weather or crash. objects.
For example, suppose your car slips on ice and hits a guardrail. Collision insurance would pay for damage to your car (and your liability insurance would pay for the damaged guardrail).
If your car is hailed and riddled with blows, your comprehensive coverage will pay for the repairs.
Collision coverage and comprehensive coverage both have a deductible, such as $500 or $1,000. The deductible is the amount deducted from your claim check. For example, if repairs from an accident cost $1,500 and you have a deductible of $500, your insurance claim payment will be $1,000.
Collision and Comprehensive reimburses you for the depreciated value of your vehicle if your car is a total loss or is stolen. The maximum compensation amount for Collision and All Perils coverage is the value of your car immediately before the accident or damage, minus your deductible.
Collision and comprehensive coverage aren’t required by any state, but if your car has a lease or loan, your lender will likely require you to purchase both coverages.
What other coverage can be included in a full coverage policy?
Some states require other coverages to be part of an auto insurance policy. Common state-required coverage includes uninsured motorist coverage, bodily injury protection coverage, and medical payment coverage.
Uninsured Motorist Coverage
Uninsured motorist coverage pays for medical expenses if you or your passengers are injured in an accident and the driver at fault is uninsured. Depending on where you live and the policy you choose, it may also cover damage to your car when the driver at fault is uninsured.
Uninsured motorist coverage is sold within limits that match your liability coverage. Uninsured motorist coverage is mandatory in some states and optional in others.
Bodily injury protection and medical payments
Personal Injury Protection (PIP) coverage covers medical expenses for you and your passengers, regardless of who caused the car accident. PIP insurance also pays for lost wages and replacement services, such as childcare, if you are unable to perform an essential job due to your injuries. Some states require PIP. In others it is optional or not offered.
Medical Payments Coverage (MedPay) helps pay medical bills associated with a car accident for you and your passengers, regardless of fault. It is mandatory in a few states, but optional in most, if at all.
To expand your full-coverage auto insurance policy even further, there are other types of auto insurance coverages you can add. Optional coverages that give you additional protection include Rental Reimbursement, Roadside Assistance and Gap Insurance.