Types of Auto Coverage Everyone who drives needs car insurance. In fact, most states require it by law. When you buy car insurance, you are buying what is called a policy. Your policy is based on a variety of factors including what kind of car you drive as well as what kind of insurance you want. Auto insurance policies are actually a package of different types of insurance coverage. The first step in understanding an auto insurance policy is to learn the various types of coverage insurance companies offer. Some of this coverage may be required by your state and some of the coverage may be optional. Liability – This coverage pays for accidental bodily injury and property damages to others. Injury damages include medical expenses, pain and suffering and lost wages. Property damage includes damaged property and automobiles. This coverage also pays defense and court costs. State laws determine how much liability coverage you must purchase, but you can always get more coverage than your state requires. When purchasing liability coverage, you will need to determine the amount of coverage needed to protect yourself if a loss occurs. Coverage is often sold with a per person and total per loss maximum amount. For example, 100/300/50 coverage means that you have coverage of $100,000 bodily injury liability insurance per person, $300,000 total bodily injury liability insurance per accident, and $50,000 property damage liability per accident. Some states have no-fault laws – meaning there is no need to determine who is at fault to receive payment for injury claims. Each party would seek recovery from his/her own insurer instead of bringing a lawsuit. No-fault does not completely eliminate the risk of you being sued. However, no-fault laws do place restrictions on when a suit can be brought forward. There are two typical types of coverage provided under a no-fault system. These coverages are Personal Injury Protection (PIP) and Residual Bodily Injury Liability Coverage. Collision – This coverage pays for damages to your vehicle caused by collision with another vehicle or object. The deductible amounts rage from $250 to $1000 Comprehensive – This coverage pays for loss or damage to the insured vehicle that doesn’t occur in an auto accident. The types of damages comprehensive insurance covers include loss caused by fire, wind, hail, flood, vandalism or theft. Like collision the deductibles can range from $250 to $1000 Medical Coverage – Pays medical expenses regardless of fault when the expenses are caused by an auto accident. Most often used for passengers inside your auto. This coverage pays for the medical and funeral expenses for you or others injured or killed in an accident while riding in or driving your auto. This coverage also often extends to insureds that are struck by a vehicle while acting as a pedestrian. Covered expenses include hospital, surgical, chiropractor, dental, and funeral expenses. This might duplicate benefits provided by your health insurer. PIP – Personal Injury Protection (PIP) is required in some states. This coverage pays medical expenses for the insured driver, regardless of fault, for treatment due to an auto accident. Uninsured Motorist – Pays your car’s damages when an auto accident is caused by a driver who doesn’t have liability insurance. Underinsured Motorist – Pays your car’s damages when an auto accident is caused by someone who has insufficient liability insurance. Rental Reimbursement – This type of coverage will pay for a rental car if your car is damaged due to an auto accident. Often this coverage has a daily allowance for a rental car. For example, $20 per day up to a total of $600. Towing– or Emergency Road Service coverage pays the cost of towing your car to a repair shop.