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What Are Some Common Types of Auto Insurance Coverage?

Understanding your insurance policy and the different types of coverage can be confusing, especially when you don’t have someone that can break it down to you in easy to understand terms. These are 5 common types of insurance coverage that you may notice on your insurance policy:

1. Liability Coverage – This coverage protects you in the event you caused a collision (also known as “at-fault”). It generally includes two components: (1) bodily injury and (2) property damage. It is required in almost every state. You can think of this as “my fault” or “my bad” coverage.

2. Collision Coverage – Covers the cost of repairing your vehicle if it is damaged in an accident, regardless of whether or not you were at fault. It is a type of “no fault” insurance coverage.

3. Comprehensive Coverage – This coverage is not limited to accidents. It covers damage to your vehicle as a result of non-collision incidents, such as falling or flying objects, vandalism, theft, natural disasters or collisions with animals.

4. Uninsured/Underinsured Motorist Coverage (UM Coverage) – This coverage protects you in the event the at-fault driver doesn’t have insurance (uninsured) or doesn’t have enough insurance coverage to pay out for your damages (underinsured). It is not mandatory to have this type of coverage in most states. It is recommended that you have this type of coverage (particularly, “Add-On UM”).

5. Personal Injury Protection (PIP) or Medical Payments (MedPay) Coverage – Both types provide coverage for your medical expenses resulting from an accident, however, PIP may also cover lost wages and other expenses. PIP and MedPay are types of “no fault” insurance.

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