What auto insurance covers
Here are some of the most common types of car / auto insurance coverage and what they cover:
Liability coverage is the “meat and potatoes” of insurance. It pays for medical bills or property repair costs that result from an accident you caused.
Uninsured motorist coverage pays for your own medical bills and property repair costs if you’re hit by someone without car insurance.
Underinsured motorist coverage works like uninsured motorist coverage. It pays out if the cost of your own medical bills and property damage exceeds the other driver’s liability coverage limits.
Collision coverage pays for your own traffic-related car repair expenses (after you pay your deductible) no matter who is at fault in a crash.
Comprehensive coverage is like Mother Nature insurance for your car. It pays for repair costs from inclement weather like tornadoes or hurricanes as well as vandalism or hitting a wild animal.
Medical payments coverage pays the medical expenses for you and your passengers after an accident, no matter which driver is at fault.
Personal injury protection coverage, or PIP, pays for medical expenses no matter who is at fault for the accident. It may also pay for things like funeral or child-care expenses.
Gap insurance pays the difference between what you owe on your car loan or lease and the vehicle’s current market value if you total your car. source: nerdwallet
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