Car insurance policies can look different depending on premiums, deductibles and coverage limits, but all car insurance policies are designed to cover three certain areas.
A full coverage car insurance policy covers:
- Liability
- Property
- Medical
Liability
Some policies strictly have liability coverage. This insurance is generally required by state law and limits can change depending on where you’re located. Liability insurance covers bodily injury and property damage a driver may cause while operating the insured vehicle. For example, if you run a red light and hit another car, you may need to file a claim on your liability insurance to pay for damages to the victim’s vehicle and any injuries you may have caused the driver and the passengers.
This insurance can also help cover legal fees. If another driver sues for damages, liability insurance can help cover your legal expenses such as court fees, defense costs and settlement expenses.
Property
Property damage coverage for your vehicle usually isn’t required but is crucial if you want to receive compensation for damages to your vehicle. The two property coverages normally available under car insurance policies are:
- Comprehensive: Comprehensive coverage provides compensation for loss of or damage to the vehicle due to fire, wind, hail, lightning, smoke, theft, vandalism and other incidents not involving collision.
- Collision: Collision coverage provides compensation for loss of or damage to the vehicle due to collision with another vehicle or object.
These coverages are generally included in full coverage car insurance policies. Full coverage policies are simply policies that provide the most coverage available for your vehicle.
Medical
Medical payments may or may not be required depending on where you live. There are also different types of medical coverage state to state.
Medical payments coverage is the more basic coverage. This provides compensation for you and your passenger’s injuries after an accident, no matter who is at fault. Whether your state is a fault or no-fault state, this insurance will pay for the medical bills of those in your vehicle.
Personal injury protection offers the same, along with some additional perks. This insurance is only available in a few states and required in even fewer. Along with covering medical bills directly related to the accident, it can also help cover expenses such as lost wages and other health costs that may be excluded from medical payments coverage.