Auto Insurance Coverage Options

Auto insurance coverage runs the gamut in terms of coverage options. On one end of the spectrum, drivers can choose liability-only car insurance coverage, purchasing only the coverage required by law. On the other end, drivers can also choose full coverage auto insurance, which includes liability as well as several other protections. Also, depending on whether you own or lease your car, your coverage might vary. Read on to learn about the most common car insurance coverage options.

• Bodily injury liability (BI) - if you are in an accident and injure people, bodily injury liability coverage will cover the amount you are obligated legally to pay for the other parties' injuries and associated costs, including medical and hospital bills, funeral expenses, lost wages, rehabilitation, pain and suffering, and long-term nursing care.
• Property damage liability (PD) - if you are in an accident and cause damage to other people's property, this coverage will pay for the damages up to a certain amount. This coverage will also pay for your legal defense if another party sues you over the damages.
• Comprehensive coverage (COMP) - comprehensive coverage is one of the optional auto insurance coverage options. This coverage protects your vehicle in the event it suffers damage from something besides a collision with a vehicle or an object. Comprehensive coverage will pay to repair or replace your vehicle in the event of fire, vandalism, theft, weather damage, and other events. Comprehensive auto insurance coverage is subject to a deductible, which is the portion of the damages for which the policyholder is responsible. Common deductibles are $100, $500, and $1,000.
• Collision coverage (COLL) - a policy that includes collision and comprehensive is usually considered full coverage auto insurance because it provides liability and physical damage protection. Collision will pay to repair or replace the insured vehicle if it collides with another vehicle or object or overturns. Collision coverage is also subject to a deductible set by the policyholder. For example, if a collision claim for $1500 were filed with an insurer and the policyholder had a $500 deductible, the insurer would only pay a benefit of $1,000.
• Uninsured motorist/underinsured motorist (UM) - if you have an accident with someone who does not carry liability insurance or who does not carry enough liability car insurance, uninsured motorist coverage will pay for your medical expenses, lost earnings, and pain and suffering. Some states require this option in auto insurance coverage.
• Personal injury protection (PIP) - also called medical payments insurance, PIP is another of the optional car insurance coverage options in most states. Regardless of fault, PIP will cover the medical and hospital bills for you and anyone else who was in your car at the time of the accident. Some states require personal injury protection in order to minimize motor vehicle accident-related lawsuits. In other states, medical payments coverage may not be available.