According to the Insurance Information Institute, an insurance trade group, policies break into six main coverages, each with its own premium.
- Bodily injury liability (required in most states). This protects you from costs if you cause an accident and injure someone else.
- Property liability (required in most states). This covers losses from damage you cause to other people’s property, including their cars.
- Collision (required by lenders and leasing companies).This pays for damage to your car resulting from an accident.
- Comprehensive (required by lenders and leasing companies). This pays for damages to your car due to theft or incidents other than a collision, such as a storm.
- Medical payments. This covers doctor, hospital and funeral bills for you and your family.
- Uninsured motorist. This protects you in case injuries to you are caused by a driver who has insufficient insurance, or none at all.
Your policy may also include minor coverages such as road service, which pays for towing, and gap insurance, which pays the difference between your car’s value and how much you owe on a loan or lease after a total loss.
