Personal Auto Insurance
About
Auto Insurance
The basic personal auto insurance mandated by most U.S. states provides some financial protection. This comes into play if you or someone using your car causes an accident that damages someone else’s car or property, injures someone or both.
You need to make the best decisions about purchasing other types of auto insurance coverage you might need. In order to do this, you’ll want to understand what’s covered, what’s not covered and what’s optional. In addition to understanding types of coverage, you’ll also want to consider coverage amounts.
Why? Because state-required minimums may not cover the costs of a serious accident. As as result, it’s worth considering purchasing higher levels of coverage.
Here’s a rundown of the types of coverage available—some are required; others are optional; all are priced individually (a la carte) to customize coverage amounts to suit your exact needs and budget.
Mandatory coverage
Bodily Injury Liability
This covers costs associated with injuries and death that you or another driver causes while driving your car.
Property Damage Liability
This coverage will reimburse others for damage that you or another driver operating your car causes to another vehicle or other property.
Frequently required coverage
Medical Payments or Personal Injury Protection (PIP)
Provides reimbursement for medical expenses for injuries to you or your passengers. It will also cover lost wages and other related expenses.
Uninsured Motorist Coverage
Reimburses you when an uninsured motorist causes an accident—or in the case of a hit-and-run. You can also purchase under insured motorist coverage, which will cover costs when another driver lacks adequate coverage to pay the costs of a serious accident.
Optional coverage
While basic, legally mandated auto insurance covers the cost of damages to other vehicles that you cause while driving, it does not cover damage to your own car. To cover this, you need to purchase the following optional auto insurance coverages:
Collision
This optional coverage reimburses you for damage to your car that occurs as a result of a collision with another vehicle or other object—e.g., a tree or guardrail—when you’re at fault. While collision coverage will not reimburse you for mechanical failure or normal wear-and-tear on your car, it will cover damage from potholes or from rolling your car.
Comprehensive
This provides coverage against theft and damage from an incident other than a collision, such as fire, flood, vandalism, hail, falling rocks or trees and other hazards—even an asteroid hit!
Glass Coverage
Windshield damage is common, and some auto policies include no-deductible glass coverage, which also includes side windows, rear windows and glass sunroofs. Or you can buy supplemental glass coverage.
Mind the gap… insurance
Who is covered—and when?
Your auto policy will cover you and other family members on your policy. It will also cover you when driving someone else’s car with permission. Your policy also provides coverage if someone not on your policy is driving your car with your consent.
The auto policy only covers personal driving, whether you’re commuting to work, running errands or taking a trip. Your personal auto policy, however, will not provide coverage if you use your car for commercial purposes. For instance, your policy will not provide coverage if you deliver pizzas or operate a delivery service. Note, too, that personal auto insurance will generally not provide coverage for a ride-sharing service such as Uber or Lyft. Some auto insurers, however, are now offering supplemental insurance products for vehicle owners providing ride-sharing services.