Car insurance can’t keep you from getting into an accident, but it can help pay the large amount of medical bills and repair costs that come from a serious accident.
How much your policy will pay out in an accident depends on the types of car insurance you buy and the limits you as the insured choose. Here’s a guide to coverage options.
Most auto policies include several types of car insurance coverage, each designed to pay for different expenses.
For example, one part of your policy might cover repairs for your vehicle, while another part of your insurance pays for someone else’s damage that you may or may not have caused .
Each type of coverage has a limit — the maximum your policy will pay.
You can customize many of these limits based on how much coverage you want and how much you’re willing to pay for your policy.
The higher your limits and the more types of coverage you buy, the less financial responsibility you’re likely to face after an accident — but the more expensive your insurance will be.
If you cause a car accident, Liability Insurance will cover the cost of any damage, injuries or deaths.
There are two types of liability coverage for auto policies:
Bodily injury liability pays for expenses from injuries or deaths in an accident you cause.
Property damage liability covers repair costs if you hit another vehicle or other property such as a fence or building.
The amount of liability coverage in a policy is usually expressed as three numbers. For example, 100/300/50 means:
$100,000 bodily injury for each person in an accident.
$300,000 for bodily injury per accident.
$50,000 for property damage per accident.
Your car insurance will pay up to the limits on your policy. After that, you’ll be on the hook for any additional expenses.
Personal injury protection and medical payments coverage pay your own medical expenses after a car accident, no matter who was at fault. They also cover medical expenses for injured passengers.
PIP sometimes called "no-fault insurance," may also cover funeral costs, child care or lost wages due to injuries from an accident.
Uninsured Motorist Coverage pays costs that result from an uninsured driver hitting you.
underinsured Motorist pays out when the at-fault driver has insurance, but their limits are too low to cover all of the damage.
Some states require a minimum amount of uninsured or underinsured motorist coverage.
Collision and comprehensive coverage are optional in every state, but may be required by your contract if you financed or leased a vehicle.
This coverage pays to either fix your car or reimburse you for its value if it’s stolen or damaged beyond repair.
Collision Coverage pays for damage to your car after an accident, regardless of who was at fault. It will also pay for pothole damage.
Comprehensive Coverage pays out if your car is stolen or damaged by anything other than a car accident.
Both comprehensive and collision coverage generally come with a deductible, which is the amount of the insurance claim you’ll have to cover before your insurer pays. The higher the deductible you choose, the lower your premium will be.