Glossary of Auto Insurance Coverages

Common Types of Auto Insurance Coverage

Bodily Injury Liability

Bodily injury liability coverage is typically mandatory, and helps pay for physical injury and death caused to others by the driver responsible for an accident.

This coverage can pay for costs such as medical bills, loss of income, and pain and suffering, but only to parties to whom the insured is legally liable. It also provides legal representation for the policyholder in the case of a lawsuit.

Most states set minimum levels of bodily injury liability coverage that drivers must have.

Collision

Collision coverage is for fixing your car after an accident, even if you are at fault. Collision coverage also applies if you hit a stationary object like a guardrail or a tree. While this type of coverage is not required by law, your lender or leaseholder may require it.

You’ll be offered different deductible amounts for collision coverage. Be sure to pick an amount you can afford. The deductible is the amount you must pay out of pocket in the event of a covered loss.

Comprehensive

Comprehensive coverage is for damage to your car from something other than a collision, such as fire, theft, severe weather, floods, vandalism or contact with animals, or falling objects.

Comprehensive coverage can also pay to fix your windshield if something cracks it (which is called a glass claim).

You’ll be offered different deductible amounts for comprehensive coverage. Be sure to pick an amount you can afford. The deductible is the amount you have to pay out of pocket before insurance kicks in.

Together, collision and comprehensive are often referred to as “physical damage” coverages.

Medical Payments (MedPay)

Medical payments coverage helps pay for reasonable and necessary medical or funeral expenses that result from bodily injury or death after an accident—regardless of who is at fault.

You may be asked to select the “limits” of medical payments coverage, which is the maximum amount the insurance company will pay for covered losses.

Personal Injury Protection (PIP)

PIP is for reasonable and necessary medical expenses, lost wages, and other damages from an accident—regardless of who is at fault. PIP could cover the policyholder and anyone else living in the same household, as well as non-related passengers, and even pedestrians harmed in the accident.

PIP is not available in every state. 

Property Damage Liability Coverage

Property damage liability coverage is typically mandatory and helps pay for damage you do to someone else's car or property when you are at fault. This coverage helps protect those found to be legally responsible in an accident. Property damage liability won't help pay for damage to your own car (that's why it's a good idea to carry collision coverage, too).

Almost every state requires drivers to carry property damage liability coverage, but the minimum amount of insurance you need varies from state to state.

Uninsured and Underinsured Motorist Liability

If the driver who caused an accident has no insurance, uninsured motorist liability coverage can help pay for things like medical care and property damage that would usually be covered by the at-fault driver's insurance. 

If the driver who caused the accident has some coverage but not enough to pay for all the damage and injuries, then underinsured motorist liability coverage would apply.

This material is for general informational purposes only. These definitions are broad descriptions of generally used insurance terms. They are not intended to alter or amend any insurance contract in any way, and these terms may mean something different in your insurance policy than how they are defined here. All statements are subject to the terms, exclusions and conditions of the applicable policy. You must check an actual insurance policy for a complete description of all coverage terms and conditions applicable to it. In the event of a disagreement between the definitions we are providing in this glossary and an insurance policy, the terms of your current policy will apply.