What Does Car Insurance Cover?

What Car Insurance Covers

There are many different types of car insurance. A standard auto policy typically covers a variety of situations, including damage to someone else's car when you cause an accident and damage from hitting an object or structure.

The coverage you have available—as well as the required minimum coverage—can change depending on your state and whether you financed your car. Most states require getting at least liability coverage.

Liability-only insurance is composed of the most basic coverage, including:

• Bodily injury coverage: This covers medical costs for injuries to other people in an accident you caused. It does not cover your medical costs if you caused the accident.
• Property damage coverage: This pays for damage that you cause to another person's property, either their car or other belongings, when you cause an accident. It does not pay for damage to your own car or belongings if you're at fault in the accident.

Many states require you to carry additional layers of auto insurance, with coverage such as:

• Medical coverage or personal injury protection: Medical payments coverage helps cover medical expenses for you and your passengers in the event of an accident. You may also need personal injury protection (PIP) coverage, which pays for additional expenses related to your accident, like your lost income during hospitalization or recovery.
• Uninsured motorist and underinsured motorist coverage: These types of coverage kick in when you're in an accident with another driver who doesn't have insurance (uninsured motorist coverage) or one who doesn't have enough coverage to pay for all the costs (underinsured motorist coverage).

If you are not satisfied with minimum state coverage requirements, you might want to consider getting full coverage insurance. Full coverage gives you extra peace of mind and is composed of two additional coverages, which go along with your liability coverages:

• Comprehensive coverage: This protects damage to your vehicle that isn't caused by an accident. This includes theft, vandalism and natural disasters like hail or falling trees.
• Collision coverage: Collision coverage helps to pay for the repair costs of your vehicle when you get into a collision of any kind. This coverage can pay for damage related to hitting a deer, telephone pole or pothole, for example.

Additional Forms of Car Insurance Coverage

There are other types of coverage you might consider when tailoring a policy to your needs. These add-ons can provide extra protection and peace of mind while on the road. Some types of additional coverage include:

• Rental car reimbursement: This coverage pays for a rental car if your vehicle is in the shop due to a covered loss.
• Roadside assistance: You can add this coverage to provide help with flat tires, towing, dead batteries, locking your keys inside and other common roadside issues.
• Rideshare: This additional coverage is aimed at those who drive for companies like Uber or Lyft, when their company's coverage is not enough. Unlike the standard coverage provided by the rideshare company, this extra endorsement covers you when you're waiting to match with a client.
• Gap (guaranteed asset protection): If you have a loan on your vehicle, you might find yourself in a situation where the totaled value of the car is lower than what you currently owe. Gap insurance can be added to cover the difference between what you owe on your car and what it's worth if it's totaled in an accident.

Speak with your insurance agent to determine which additional coverage may be right for you and your driving habits.

What Car Insurance Doesn't Cover

Car insurance policies do not cover everything, and it is important to understand what is excluded in your policy. Some of the common exclusions are:

• Intentional damage: These are any damages caused intentionally to your car, such as breaking a window because you're locked out or setting your car on fire for insurance money. Some policies also exclude damage caused to your vehicle if you have an accident while under the influence.
• Damage exceeding your coverage limits: If the accident you caused is a pricey one, your insurance will only cover the losses up to its maximum limit. Any repair costs or medical bills above that threshold will need to be covered out of pocket.
• Mechanical breakdowns: Insurance policies cover damage caused by accidents, but they do not cover mechanical breakdowns like engine failure or transmission problems.
• Normal wear and tear: Regular maintenance and wear and tear on tires, brakes or other parts are not covered by car insurance policies.
• Personal belongings: Any damage or theft of personal belongings inside the car, like laptops or phones, is not covered by car insurance policies. It is possible, however, to list the personal belongings inside your car on a homeowners or renters policy with many insurance companies.
• Racing or illegal activities: Any damage caused while participating in activities like racing or other illegal actions will not be covered under insurance policies.
• Aftermarket add-ons: That cool stereo system or those flashy rims may be something you've always dreamt of having on your car, but damage or theft of them isn't likely to be covered by your car insurance.
• Drivers who live with you but aren't named in your policy: If your roommate or teen child isn't listed on your auto insurance policy but drives your car, any accidents they have won't be covered.

It is essential to read and understand the policy documents thoroughly to ensure that you have adequate coverage in case of an accident and to understand the circumstances under which coverage may not be provided.

The Bottom Line

Getting an auto insurance policy that fits your needs can be tricky. With Experian's auto insurance comparison tool, you can shop around for insurance with over 40 companies and find the policy that's right for you.