Auto insurance is a package of seven primary coverages. Taken together, these coverages make up a standard auto policy and each of these coverages has its own separate premium. Your premium payment is the total of these separate premiums.
- Bodily injury liability provides protection if you injure or kill someone while operating your car. It also provides for a legal defense if another party in the accident files a lawsuit against you. Bodily injury liability covers injury to people, not your vehicle hence it’s a good idea to have the same level of coverage for all of your cars.
- Medical payments, no-fault or personal injury protection coverage usually pays for the medical expenses of the injured driver and passengers in your car. There may also be coverage if you are injured by a vehicle as a pedestrian.
- Uninsured motorists coverage pays for your injuries caused by an uninsured driver or, in some states, a hit-and-run driver, in a crash that is not your fault. In some states there is also uninsured motorist coverage for damage to your vehicle.
- Comprehensive physical damage coverage pays for losses resulting from incidents other than collision. For example, comprehensive insurance covers damage to your car if it is stolen; or damaged by flood, fire or animals.
- Collision coverage pays for damage to your car when your car hits, or is hit by, another vehicle or other object.
- Property damage liability protects you if your car damages someone else’s property. It also provides you with legal defense if another party files a lawsuit against you. It is a good idea to purchase enough of this insurance to cover the amount of damage your car might do to another vehicle or object.
- Rental reimbursement coverage pays for a rental vehicle (usually up to $25 a day) when the insured’s vehicle is out of commission as a result of a loss covered under comprehensive or collision coverages.