What does car insurance cover?

I know car insurance pays to fix my car after an accident, but what else is covered by a basic auto insurance policy?

Car insurance policies generally include the following coverages. If you currently have coverage or are looking to find cheaper car insurance, it's a good idea to review your coverages at least once a year to make sure you have adequate protection.

1. Bodily Injury Liability

Bodily injury liability coverage will pay for injuries you or another insured cause to a third party. This coverage also extends from your car insurance policy to someone else's car you may be driving as long as you are using the vehicle with resonable belief that you are entitled to do so.

With the meteoric rise in health care costs, it is very important to carry high enough bodily injury liability limits. State mandated limits are usually too low, so consider buying as much coverage as you can afford. Liability insurance is a fairly affordable coverage, so don't skimp to save a few bucks.

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2. Medical Payments or Personal Injury Protection (PIP)

Medical payments and PIP coverage are similar and the state in which you live may use one or the other or even both coverages. This coverage pays for injuries to you or other passengers of your car when involved in an accident. PIP can include not only medical payments, but also lost wages, other expenses and possibly funeral costs. This coverage also gives you some protection if you are injured getting into or out of a vehicle or are hit by a car while walking.

3. Property Damage Liability

Property damage liability is the car insurance coverage that pays for damage you cause to someone else's property. It could apply if you hit another vehicle, a mailbox, bridge railing, fence or any other object.

4. Collision Coverage

Collision coverage is the part of your car insurance that pays to repair your own car in the event you hit another vehicle or object or roll your car. A deductible applies to collision coverage, so you can expect to pay the first portion of any claim that falls under the collision coverage. The higher a deductible you have, the less the coverage will cost you.

In the event you are in an accident that was not your fault, you may turn in a claim on your own car insurance policy. Your insurance company will subrogate, or be reimbursed by, the at-fault driver's insurance company. Your deductible will also be reimbursed. If the other driver carries low liability limits or is uninsured, your insurance company may sue the individual to recover their costs.

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5. Comprehensive Coverage

This is the coverage that pays for losses to your car such as hail, fire, theft or collision with animals. This coverage requires a deductible as well, so you can expect to pay a portion of your comprehensive claim. As with collision coverage, the higher the deductible you buy, the lower your car insurance cost will be.

Cracked and broken windshields are a common comprehensive claim. Many insurance companies will waive the deductible for rock chip repairs, so ask your agent if your company offers this benefit.

6. Uninsured and Underinsured Motorist Coverage

If you or another insured are hit by a driver who carries low bodily injury liability limits or is uninsured, this is the coverage that will pay your medical expenses. With the low state mandated minimum liability limits, this is a good coverage to buy. Many drivers carry only the minimum limits, so you may not receive full compensation for your injuries if struck by one of these drivers. That is where your own UM/UIM coverage kicks in and helps pay your bills.

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