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Types of Coverage


Liability- Liability coverage generally pays for bodily injury and property damage when you are responsible.  The amount you are required at a minimum varies from state to state.  Liability coverage also usually pays for a legal defense and court costs, if necessary.  



Comprehensive- Comprehensive coverage pays for any losses to your auto due to events such as theft, break-ins, fire, or natural disasters like flood, hail damage, earthquake, or hurricane.  Normally if you finance your car or lease an auto your finance company will require you to carry comprehensive coverage.  You can expect a deductible for this coverage.  The higher your deductible, the lower your rate will be.



Collision- Collision coverage insures you against damage from events such as collision with any other object such as an auto, fence, wall, etc.  You can expect to have a deductible for this coverage too.   Normally if you finance your car or lease an auto your finance company will require you to carry comprehensive coverage.



Personal Injury Protection- Normally pays medical costs for persons, regardless of fault, for medical costs associated with an accident.  PIP may be required in some states.  



Uninsured Motorist- Uninsured Motorists will pay for your damages if injured by a driver without liability insurance.  Property damage may also be paid in some states.



Underinsured Motorist- Similar to Uninsured Motorist, but applies to injury caused by an underinsured driver.  State laws may vary as to application.



Rental Reimbursement- self-explanatory.  Pays rental expenses for another auto if your vehicle is disabled due to an accident.  


Also check out our article, What Every Driver Should Know About Their Insurance Policy



These term definitions are for general informational purposes only and are not intended to alter or replace the insurance policy. Additionally, this information is not intended to fully set out your rights and obligations or the rights and obligations of the insurance company. If you have questions about your insurance, you should consult your insurance agent, the insurance company, or the language of the insurance policy.  Policies, terms, and laws vary from state to state.


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