subject: Learn about Coverages in Plain English [print this page] Learn about Coverages in Plain English
If you want to get the right coverage, it makes sense to know what each one is. With that in mind, here is a list of the most common types of coverages. Bodily Injury Liability Covers: * Injuries or death to others when you are responsible o medical bills o loss of income o anguish * You legal defense if the other party in a collision sues you Does not cover: * Damage to your vehicle * Anything if you are not responsible for the collision Bodily injury liability coverage is often mandatory in the US Property Damage Liability Covers: * Damages to someone else's property by your vehicle when you are responsible * legal defense if another party files suit Comprehensive Comprehensive coverage comes in two varieties. The first is "other than collision" and the second is "collision". Comprehensive (other than collisions) covers: * your vehicle's losses from non-collision incidents o theft o flood o animals (sometimes) * the cost of fixing your vehicle minus the set deductible Comprehensive (collision) covers: * damage to your vehicle in any collision, regardless of fault Comprehensive coverage is not required by states, but is often required if you are renting or leasing a vehicle. Uninsured Motorist It covers: * you and your passengers for injuries, damage, or death when the the driver at fault has no insurance or commits a hit-and-run * medical expenses only up to the limit on the policy It does not cover: * the other, uninsured motorist Underinsured Motorist Covers: * Damages, injuries, or death for you and your passengers when the responsible party has insufficient insurance * This policy essentially makes up the difference between what the at-fault party's insurance covers and the remainder of the damages. Personal Injury Protection (PIP) Covers: * medical and funeral expenses of the insurance holder or his or her party * medical and funeral expenses of pedestrians struck by the insured party * the insured person's injuries, regardless of fault A certain amount of coverage must be bought. PIP coverage will not exceed that dollar amount. If you do not have health insurance, it may be wise to buy PIP with medical coverage. In some states, PIP is unavailable; in others, it is mandatory. Medical (Payments) Coverage Covers: Medical expenses for the insured and the insured's passengers in a collision, regardless of fault Covers policyholder, sometimes family of the policyholder, when he or she is struck by a vehicle as a pedestrian Coverage is only up to the specified amount in the contract. Gap Loss Covers: * The difference between sticker price and vehicle value at the time of a collision for a specified period of time after the purchase or leasing of a vehicle When you drive your new vehicle, it loses 1/3 of its value immediately. With Gap Loss coverage, you are able to recoup that value if the vehicle is totaled. This isn't even the complete list of car insurance types, but it should be enough for you to grasp what you are looking at when you shop for car insurance, especially with free online car insurance quotes.
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