Intro to personal auto insurance
1. Liability Only
What it is: Covers injuries and property damage you cause to others in an accident where you’re at fault.
What it does NOT cover: Your own injuries or damage to your own car.
Why it matters: Required by law in most states.
Two parts:
Bodily Injury Liability – Pays medical expenses, lost wages, and legal fees if you injure someone.
Property Damage Liability – Pays for damage to another person’s property (like their car or a fence).
** If liability only, the policy will have NO DEDUCTIBLES
3. Full coverage = comp + coll
Collision Coverage
What it is: Pays to repair or replace your own car after an accident, regardless of who’s at fault.
Example: If you hit a tree or another vehicle, collision pays for your car’s repairs.
Comprehensive Coverage
What it is: Covers damage to your car from non-collision events.
Examples: Theft, vandalism, hail, flood, falling objects, or hitting an animal.
DeductibleWhat it is: The amount you pay out of pocket before your insurance kicks in.
Example: If your deductible is $500 and repairs cost $2,000, you pay $500 and your insurer pays $1,500.
2. Limits
What it is: The maximum amount your insurer will pay for a covered loss.
Example format: 100/300/50 means:
$100,000 max per person for bodily injury
$300,000 max total per accident for bodily injury
$50,000 max per accident for property damage
Tip: Higher limits give more protection but cost more.
4. Uninsured/Underinsured Motorist (UM/UIM) Coverage
Uninsured Motorist: Pays for your injuries (and sometimes property damage) if the at-fault driver has no insurance.
Underinsured Motorist: Helps if the at-fault driver’s insurance limits aren’t enough to cover your costs.
Why it matters: Millions of drivers carry little or no insurance.