When you’re shopping for car insurance, it’s easy to get overwhelmed by the different plans and options. But there are really only three major things that all policies should include: personal injury protection (PIP), comprehensive insurance, and collision insurance. You can also add liability coverage if you want to protect yourself against being sued in case of an accident.
Personal injury protection (PIP)
Personal injury protection (PIP) is a no-fault coverage that pays for medical expenses and lost wages. It can also cover you, your passengers and pedestrians injured in an accident.
PIP is not required in all states, so check with your insurer to see if you need it. If it’s unavailable in your state, look for collision coverage that includes PIP benefits. If you do purchase PIP benefits on your car insurance policy, keep in mind that they’re not intended to be a substitute for health insurance—they only cover injuries sustained during a car accident (or other incidents covered by the policy).
Comprehensive insurance covers damage to your car from things like fire, theft, vandalism, and natural disasters. Examples of what is covered under comprehensive insurance include:
- Damage caused by a collision with an animal (e.g., deer)
- Theft of the vehicle or its contents
- Damage due to flood waters or mudslides
- Loss or destruction of vehicle in an accident involving another driver who does not have liability coverage on his/her own policy
Collision insurance is the type of insurance that covers damage to your car caused by an accident. If you hit another car, or if another car hits you, this is the coverage that will cover the expense of repairing or replacing your vehicle. It can also cover damage caused by weather or theft in some states, though not all states require this coverage as part of their mandatory auto-insurance package.
If you want collision coverage on top of other types of insurance (like comprehensive and liability), it’s usually possible to add it at a later date without having to get new quotes or anything else; just call up the company when you’re ready to do so and they’ll take care of everything for you!
Bodily injury and property damage liability coverage
If you’re the driver in an accident, bodily injury and property damage liability coverage will help cover all of the expenses of people injured in your car. This includes medical bills, lost wages, pain and suffering—even if you were at fault for the accident.
For example: If a drunk driver rear-ended my car while I was stopped at a red light, I would have to pay for their injuries out of my own pocket unless they had their own health insurance plan (which is rare). But if they didn’t have health insurance or couldn’t afford treatment without help from me? That’s where my bodily injury coverage comes into play. My auto insurance will cover up to $1 million per person/$3 million per crash as long as I’m not underinsured (more on that later!).
This is what your car insurance should cover.
You need to know what your car insurance should cover.
Your car insurance should cover the following:
- Personal Injury Protection (PIP) – This is the minimum amount of coverage you need. PIP covers medical expenses for you and your passengers in case of an accident, regardless of who’s at fault. It also covers lost wages if you have to miss work due to injuries from a crash.
- Comprehensive Insurance – This covers damage to your vehicle from other people or events, like theft or vandalism—even when someone accidentally hits your parked car with their own vehicle!
- Collision Insurance – This covers damage to your vehicle from hitting something else (another person’s car, a tree branch on the road, etc.).
- Liability Insurance – If someone sues you because they got hurt in an accident caused by you, liability can help pay their medical bills and other related costs up to $1 million dollars per incident (in Florida).
All in all, the best way to ensure that your car insurance is comprehensive is to take care of all factors that could affect your liability and accident rates. This includes driving safely, maintaining a good credit rating and being aware of how much coverage you need for each type of damage (bodily injury and property damage liability coverage).