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What Does Car Insurance Cover?

Auto insurance coverage depends on your specific policy, and can help you recover physically and financially after an accident.

Depending on your policy, car insurance can cover the costs of repairs to your vehicle; injuries to you, your passengers and others; and damage to others’ vehicles and property. Coverage isn't the same for everyone because car insurance is made up of multiple coverages, many of which are optional.

What car insurance covers

Most states require liability coverage for bodily injury and property damage. Liability covers other drivers on the road, not you or your vehicle — coverage that can pay for repairs to your car is not required by any state. Some states require coverage for injuries to you and your passengers.

Nine common car insurance coverages and what they cover are highlighted below, along with how common it is for them to be required by states.

What does auto insurance cover?
Coverage What it covers Protects Number of states where required
Bodily injury liability (BI) Injuries to others in an accident Others from damage you cause 48
Property damage liability (PD) Damage to others’ property in an accident Others from damage you cause 49
Collision Repairs to your car if it’s damaged in an accident with another vehicle or object Your car 0, but often required by auto loan lenders
Comprehensive Repairs to your car from non-driving related accidents, like theft and hail Your car 0, but often required by auto loan lenders
Uninsured motorist (UM) Bodily injury and sometimes property damage liability if an uninsured driver causes an accident You and sometimes your car and passengers 19
Underinsured motorist (UIM) Bodily injury and sometimes property damage liability if an uninsured driver causes an accident You and sometimes your car and passengers 17
Personal injury protection (PIP, or no-fault insurance) You and your passengers’ medical bills and lost wages, regardless of fault You and sometimes your car and passengers 17
Medical payments (MedPay) Medical bills for people involved in an accident, regardless of fault You and your passengers 2
Gap insurance Difference between the insurance payout and the amount left on your auto loan after a total loss Your car 0, but often required by auto loan lenders

If you have auto insurance, chances are your policy provides liability coverage. Similarly, you likely have comprehensive and collision coverage if you financed your car. Even if you aren’t mandated to buy more coverage, it's often a good idea because an extensive auto insurance policy helps you recover physically and financially after an accident.

Car insurance covers losses up to a certain amount, which is called the coverage limit. Each component of your policy has its own coverage limit, so it's important to make sure each one is high enough.

Get the coverage that's right for you.

Bodily injury and property damage liability coverages

Two types of liability coverage are required in almost every state — bodily injury liability and property damage liability. The exceptions are New Hampshire, where auto insurance isn’t required at all, and Florida, where bodily injury liability isn’t required.

Liability insurance covers damage and injuries to others. It does not cover you, your passengers or your car. If you are found to be the cause of an accident that leads to someone being injured or their property, including their car, being damaged, liability protection can step in.

Bodily injury liability covers other people’s injuries if you are found at fault for an accident. It can cover:

  • Medical and legal expenses
  • Lost wages
  • Funeral costs
  • Pain and suffering

Property damage liability helps cover the cost to repair or replace someone else’s property after an accident. It covers court fees, damage to another person’s car and property damage to:

  • Vehicles
  • Fences
  • Houses
  • Mailboxes
  • Businesses

and much more.

Example: You cause an accident that results in another driver breaking a bone. Bodily injury liability can cover their hospital bill and lost wages.

Comprehensive and collision coverages

Comprehensive and collision coverages protect your car. The combination of liability, comprehensive and collision is often referred to as “full coverage,” but full coverage does not exist as a standalone coverage. Many drivers choose to add comprehensive and collision because without them, you are not covered for damage to your own vehicle.

Collision coverage covers the cost to repair your car if it is damaged in an accident with another vehicle or object. These include collisions with:

  • Other cars
  • Objects, like trees, street lamps or fences

Collision coverage also covers single-car accidents involving rolling, flipping or falling over.

Comprehensive coverage covers your car if it is damaged by a non-driving related incident. For instance, comprehensive coverage covers you if your car is damaged by:

  • Wind and hail
  • Fire
  • Theft or vandalism
  • Falling objects

Additionally, comprehensive coverage is the part of your policy that would cover your vehicle if you hit an animal.

Example: You accidently back into a light pole in a parking lot, denting your fender. Collision coverage can help pay for the repairs.

Get your cheapest full coverage quotes when you compare companies.

Uninsured/underinsured motorist coverage (UM/UIM)

The uninsured or underinsured motorist coverage part of an auto insurance policy protects you in an accident where the other driver doesn’t have sufficient insurance or is uninsured. It is common for drivers to be underinsured, so UM/UIM coverage is a good option for many drivers, especially in states with low liability coverage minimums.

UM/UIM covers bodily injury, but not always property damage. Make sure to double check which type of coverage is required in your state, and which you have.

Example: Another driver causes an accident that totals your vehicle, but they do not have enough liability coverage to cover the cost of your totaled car. Underinsured motorist protection can step in to cover the difference.

Personal injury protection (PIP, or no-fault coverage)

Personal injury protection, also called no-fault insurance, covers medical expenses and lost wages if you or a passenger is injured in an accident. It’s sometimes called no-fault insurance because it’s required in no-fault states.

PIP can cover many types of expenses related to injury in an accident. Whether it’s a one-time hospital visit, ongoing care or an operation, personal injury protection protects you financially by making sure you don’t get stuck with costly medical bills after an accident.

Example: After an accident, you are unable to work for two months. Personal injury protection can compensate you for lost wages during that time.

Medical payments (MedPay)

Medical payments coverage is similar to personal injury protection, but it covers fewer expenses — only medical bills and funeral costs. MedPay does not cover lost wages or other non-medical expenses like PIP might. Nevertheless, it is a valuable protection for you and your passengers, as it covers injuries regardless of fault.

Example: After an accident, you have to go to physical therapy once a week. Medical payments coverage can help pay for your visits.

Gap insurance

Gap insurance coverage (“guaranteed auto protection”) protects you if you experience a “total loss” and owe more on your car than your insurance pays. A total loss can be if your car is totaled in an accident or stolen. Gap insurance is only for people with an auto loan, as money is still owed on the car.

Example: Your car is totaled in an accident and you receive a $20,000 insurance payout to replace your car. However, you still owe $25,000 on your auto loan. Gap insurance coverage can help cover the $5,000 difference.

Bottom line

What auto insurance covers depends on your specific policy. You’ll probably have to purchase a small amount of liability coverage, as most states mandate coverage minimums. However state requirements are often too low, so you should strongly consider increasing your coverage limits or adding more protections to your policy.

Car insurance doesn’t always cover you and your car — many state minimum policies only cover injury to others and property damage. Adding full coverage or gap insurance protects your car, and other coverages, like PIP and MedPay, can help cover injuries to you and sometimes your passengers.

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