When shopping for car insurance it can be overwhelming with all the different coverages that are offered. It doesn’t help that the insurance industry uses acronyms and jargon for everything. Bodily Injury and Property Damage are the only coverages that are required by law in every state, all others are optional protection. Every state has different minimums required for their residents. Below are definitions and examples of the types of coverages available.
Bodily Injury (BI): This covers the medical bills of the people in the car you hit. The coverage is shown with two numbers, the first is the amount of coverage per person, the second is the total per accident. Some states list this with three numbers, the third number refers to the property damage you cause. For example, Oregon’s state minimum are 25/50. This means that if you cause an accident each person would only get $25,000 for medical bills, with the total medical bills for all people being $50,000. If you hit a car with three people in it and they all require $25,000 worth of medical attention, your insurance will only cover the first $50,000 and you can be sued for the extra $25,000. You can always get more coverage than your state minimums require and it does not cost much more to increase coverage.
Property Damage (PD): This covers the damage you do to any property of someone else. Whether it is a car or a telephone pole or a house. Many states list this as the third number of the bodily injury. For example, in Delaware the minimum required by law is 15/30/5. So if you carry the minimum required by law and you hit another car, your insurance will only pay $5,000 to fix that car and you can be sued for the rest. If you only carry the state minimums then hope you don’t total a new BMW.
Uninsured Motorist (UM): This will cover the medical bills of those in your car if you are hit by someone with no car insurance. It is listed with two numbers just like bodily injury. Yes, every state requires every car to carry insurance but there are people out there who drive without insurance.
Underinsured Motorist (UIM): This covers the medical bills of those in your car if you are ever hit by someone who does not have enough insurance. For example, you are hit and your medical bills come to $30,000 but the other driver only carries your state required minimum which is $15,000, then your insurance will cover the difference up to the amount you have purchased.
Uninsured Motorist Property Damage (UMPD): If you do not have collision, this is a coverage you can get which protects your vehicle if it is hit by someone who is proven to have no insurance, up to the maximum your state allows. If you are hit by someone with no insurance then UMPD will only cover your property while UM will only cover your medical. Having both will protect you, your passengers and your vehicle from those who hit you and it is proven they don’t have insurance.
Personal Injury Protection (PIP): This is an extra coverage in some states and required in others. It basically covers medical, but it varies so much state to state that you should talk to your agent so they can explain all that goes under this coverage.
Comprehensive (Comp): Is one side of the coin of the coverage needed for full coverage. It protects your vehicle from fire, theft, vandalism, malicious mischief, glass, falling objects and the hitting of animals. You have to pay your deductible first and then your insurance will cover the rest.
Collision (Coll): This is the other half of full coverage insurance. It covers your car if you are the one doing the hitting, if you are hit by someone with no insurance or involved in a hit and run. Like comp you have to pay your deductible first.
Towing: Is coverage for having your car towed up to a set amount that you purchased.
Rental: Is a coverage that if your vehicle is in the shop due to a covered loss, then this will provide a rental car while it is being fixed. It comes listed as a per day/per incident. So if you have coverage at 24/600, it means that your insurance will pay for a rental car at $24 a day with the total bill being no more than $600.