With few exceptions, car insurance is required throughout the nation. What it covers, however, can vary. Typically, though, the policy will cover the driver, other licensed household members, and anyone else who has permission to drive the car.
Different states set different minimum requirements for coverage both for type and amount needed. The sorts of coverage that may be required are liability insurance, personal injury protection or medical payments, and uninsured or underinsured motorist coverage.
Liability insurance covers just that– your personal liability arising from an accident. It covers bodily injury to others and property damage. The limits of that coverage are defined by three numbers that set the maximum for bodily injury per person, bodily injury per accident, and property damage per accident.
Liability insurance would cover the medical expenses of someone injured in an accident for which you are liable. For instance, the other driver has $80,000 in medical expenses, and your liability coverage goes up to $100,000 bodily injury per person. That would mean that you were completely covered. However, if the same amount of coverage were in place but the expenses were $120,000, you would be on the hook for the difference.
Just as liability insurance covers the damage done to others, personal injury protection or medical payments insurance is there to provide for you. What is covered can vary. Depending on policy, this can cover medical expenses, lost wages, and even funeral costs.
Just because car insurance is generally required does not mean that everyone follows the law. What happens if someone without insurance crashes into you? While a civil suit seeking damages could be successful, it is of little use if the person lacks the resources to pay.
This is where uninsured and underinsured motorist (UIM) coverage come in handy. When the party responsible for the accident either lacks insurance or has insufficient insurance, this kicks in to cover your medical expenses.
A variation on this is uninsured motorist property damage (UMPD). Instead of bodily injury, this type of coverage provides for repair or replacement of your car. In terms of repair or replacement of the car, that is what collision and comprehensive coverage deal with. This covers things ranging from storm damage to crashing into another car.
There are a few other extras out there, too. For instance, full glass coverage is a handy feature if faced with a chipped or broken windshield.
