Do I Have Enough Accident Coverage?

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There are many types of auto insurance available to consumers. Depending on the state in which you live, and depending on the ownership status of your vehicle, you may be required to hold a certain minimum level of coverage. The type of insurance coverage you hold can vary across the life of a car. On a car you’ve just purchased and are still paying for, it’s recommended to hold what’s considered “full coverage,” and it may be a requirement of your loan terms. When you’re done paying for your vehicle, you may wish to reduce the coverage amount to the bare minimum in order to lower your monthly premiums, though that is not usually recommended.

When you call your insurance company after an accident and report the details, a representative will be able to explain the details of your plan and what your policy covers. Your insurer can also answer these questions before you are in accident—don’t wait until you’re in a wreck or after a natural disaster happens to find out you don’t have adequate coverage.

  • Liability: Liability coverage pays for damages caused to others’ property and bodies by your error. If you are sued for the damage, liability coverage also pays court costs and for a legal defense. Liability coverage for property damage covers damage to property and the loss of its use; liability bodily injury coverage can cover medical expenses and lost wages, and can compensate for pain and suffering. Most states require liability coverage, with minimum amounts of coverage for bodily injury to another person and to property.
  • Collision: Collision coverage pays for damages to your vehicle caused after a collision with another vehicle or object, or damages caused in a vehicle rollover.
  • Comprehensive: As its name suggests, comprehensive coverage exists to cover a variety of things. Comprehensive coverage can be used to pay for many acts of nature or acts of human destruction, such as fire, wind, hail, and water damage, and theft or vandalism.
  • Medical payments: Quite simply, medical payments coverage allows the insurance company to make payments for medical bills and funeral expenses as necessary if the coverage holder is injured in an accident. This coverage is usually offered without a deductible or copay. This is often the same thing as Personal Injury Protection coverage.
  • Personal Injury Protection (PIP): Some states require PIP coverage as part of a minimum insurance package. It covers medical expenses for covered parties, and can also cover rehabilitation, lost wages, and funeral expenses. “PIP” often refers to the same benefits as provided under medical payments coverage.
  • Uninsured/underinsured motorist: While it is not required by every state, many states require uninsured or underinsured motorist coverage as part of a basic minimum level of coverage. Uninsured motorist coverage protects the insured against those who drive with no liability insurance. Underinsured motorist coverage protects the insured against those who drive with only a minimum level of coverage that, while it may meet state requirements, is not enough to pay for damages the driver may cause. These types of coverage pay for medical expenses, pain and suffering, and lost wages caused by an accident with an uninsured or underinsured driver.

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