What Auto Insurance Really Covers
Auto insurance can offer up to 6 different types of coverage. What does your policy cover? Find out more here.
Did you know that auto insurance protects you against financial loss in several different ways? It may have up to 6 different types of coverage:
- Property Damage: pays for damage that you do to someone else’s property, like a car, mailbox, fence, or power pole. It also pays when someone who has permission to drive your vehicle gets into an accident.
- Bodily Injury: pays when you hurt someone else in a car accident. This coverage is critical because you could be sued for a huge amount of money if you get into a serious accident. It also protects you when you drive someone else’s car with their permission.
- Personal Injury Protection: pays when you or passengers of your car are hurt in an accident. It may cover the cost of medical treatment, rehabilitation, lost wages, and funeral expenses.
- Collision: pays for damage to your car, less your out-of-pocket deductible, when you get into an accident, even if it’s your fault. When you’re not at fault, your insurance company will attempt to collect payment from the other driver’s insurance and reimburse you for the deductible.
- Comprehensive: pays for damage to your car, minus the deductible, when you have a loss caused by something other than a collision, such as hail, fire, vandalism, or hitting an animal (like a deer).
- Uninsured and Underinsured Motorist: pays when you’re in an accident with someone who doesn’t have their own auto insurance or who flees the scene. This coverage also protects you if an at-fault driver has insurance, but not enough coverage to pay your total loss.
States and lenders have different requirements for the types of auto coverage you must 
purchase. Save money by shopping and comparing prices for auto insurance every year.
You can get multiple quotes from top insurance companies for free at sites like insurancequotes.com and carinsurance.com.
Other Links You Might Like:
Your Guide to Renters Insurance
5 Clever Ways to Save More Money
25+ Best Tools for Money Management and Productivity
Been in a Parking Lot Accident? 5 Tips You Should Know
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About the Author
Laura Adams received an MBA from the University of Florida. She’s an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura’s previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.
