This protects your assets when you are legally responsible for injuries and damages caused in an accident. Liability is divided into two coverages.
1.- Bodily Injury Liability -medical costs, loss of income, funeral expenses of other people.
2.- Property Damage Liability -repair or replacement of other driver’s car and damage to structures.
This is the required coverage to meet the financial responsibility laws in most states. The limits (the amount the insurance company has agreed to pay) vary per state.
There are more uninsured drivers than we tend to think. According to the National Association of Insurance Commissioners‘ website, nearly 13% of motorists, or about one in eight drivers, were uninsured in 2014.
Uninsured and Under-insured coverage is divided into two sections:
1.- Bodily Injury -covers injuries or death of passengers in your car (including you).
2.- Property Damage -covers repairs or replacement of your car, if the other driver has insufficient coverage.
If you own your car outright, this coverage is not required. However, you would be responsible for repairing or replacing your car if it is damaged in an accident.
Coverage for your car is divided into 2 parts:
Collision: covers your car hitting another car or structure, or another car hitting you. Hitting an animal is covered under comprehensive.
Comprehensive: cover damage to your car by anything other than collision. Covers theft, fire, vandalism, windstorm or hitting an animal.
These auto insurance coverages are secondary and cannot be bought without the primary coverages. Most policies offer them and can include:
Medical Payments -medical or funeral expenses for you and/or your passengers
Towing and Labor Costs -reimburses you for towing and basic roadside assistance
Rental Reimbursement -Reimburses you for car rentals while your car is in the shop due to a covered accident.
Sound System and Custom Equipment -protects custom equipment you have installed in your car.