Liability coverage has to do with the damage you cause to others. This coverage is expressed as three numbers, for example 100/300/100, which means $100,000 in bodily injury coverage per person, $300,000 in bodily injury coverage per accident and $100,000 in property-damage coverage per accident. This coverage is also set up to pay for your legal bills if the accident is determined to be your fault. Because this coverage covers the damage you do to others, most states require a minimum level of coverage. Bodily injury liability covers not only medical bills but also lost wages to the other party, if you are the cause of an accident.
This pays for repairs or replacement of property that you damage or destroy. For example it could be another car, fence or wall. This coverage can also pay for pain and suffering damages if you are due to a car accident.
Collision insurance covers the repairs on your own vehicle if you get in an accident, regardless of fault. If there is significant damage to your car, it is called “totaled”. When repair costs exceed a car’s value, such as more than 70 percent, the insurance company will typically tow the car to a salvage yard and reimburse you the cash value of your vehicle so you can purchase a new car.
Medical payments coverage pays for the medical expenses you and your passengers incur as the result of an injury from an accident. You are also covered when driving someone else’s car or if you are injured when another car hits you. This policy pays regardless of whose fault it is. Personal Injury Protection coverage pays for medical expenses and lost wages for you and any other passengers who are injured in an accident. Not only that, it also covers funeral expenses. However, if you already have good health and disability insurance, you may not need not to purchase this coverage as it may duplicate the coverage you already have.
This coverage pays for any damage to your car that is not due to an accident. It covers natural disasters such as fire, earthquake or flood, vandalism or theft and large animal collisions (eg: hitting an elk or deer).
An Uninsured motorists (UM) policy covers your medical bills if an uninsured driver hits your car or commits a hit-and-run (hitting your car and quickly driving away). This coverage helps when someone causes an accident but doesn’t have enough insurance or funds to cover your medical or other expenses. In that case, their insurance pays its maximum and then your UM coverage pays for the rest, within your policy limit.