How to Understand Car Insurance

Having car insurance isn’t just the law in most states, it is a necessary to protect your health and financial stability. Car insurance will pay for your repair bills and medical bills if you are in a car accident. Understanding car insurance and its various options is easy once you understand what each option covers.

*When a car accident is your fault, property damage liability covers the cost of repairs to another car. If you do not have this insurance, the driver(s) of the other vehicle(s) can sue you for damages. It is important to have high coverage amounts for this option because car accidents can be expensive, especially when more than one other car is damaged. This option also covers damage to other property such as buildings, fences and electrical poles.

• When someone in an accident is hurt, bodily injury liability covers the medical bills to make the injured person whole. Whether the injured party is yourself, a passenger, or someone in the other car (if the accident was your fault), bodily injury will pay for immediate and extended medical services up to the coverage limit. This is another area that should have high coverage amounts.


• When you are in an accident and the other driver has no insurance, collision covers the cost of repairs to your car. It also provides coverage for damage to your vehicle from an accident that was your fault or from damage from a road hazard, such as a pothole.


• When your car is stolen, vandalized, on fire, in a flood or hit by hail, comprehensive coverage will pay the cost of damages to your vehicle.


• When you are hurt and can’t work as a result of an auto accident, personal injury protection, or PIP, can cover lost wages, medical bills and other costs that result from an accident.