Insurance requirements are not the same in all states. However, there a basic auto insurance policy will generally provide the same type of cover. This article will provide a detailed discussion on what is typically covered by basic auto insurance.

The cost of basic auto insurance will vary, depending on the amount cover and the profile of the insured driver.

When it comes to auto insurance, you always have options, like gap cover. An auto insurance policy should provide you with essential cover during an accident. Additional insurance can be obtained for items not covered by basic insurance; this could cover the contents of the vehicle or goods in transit. In all events, you will need the minimum basic cover which will be detailed in the sections that follow.

Bodily Injury Liability

If someone is injured in an accident while you are driving, you could be liable for all costs relating to their injury. It is, therefore, important to have sufficient injury liability insurance.

This provides cover for the policyholder, or permitted driver, for injuries sustained by third parties involved in the accident. In other words, the driver or passengers of other vehicles.

Bodily injury liability does not cover the driver or passengers of the insured vehicle. You and your passengers are covered by a separate form of auto insurance.

Personal Injury Protection (PIP)

Unlike bodily injury liability, which covers third-party injuries, personal injury protection covers the designated driver of the policy holder’s car and their passengers.

This pays for the medical costs relating to injuries sustained by you (or authorized driver) and your passengers.

Property Damage Liability

Generally, property damage liability refers to the cost of repairing other vehicles involved in the accident. It also applies to general property damage, like fences, buildings, or public fixtures that may be damaged during an accident.

Collision Insurance

This covers the cost of repairing your vehicle after a collision. The term collision is used broadly, it can be a collision with another vehicle, a fixed structure (like a lamp post or building). It also includes damage caused by potholes.

Generally, collision insurance will require a deductible, a fixed amount that you will have to pay when you claim. If you were at fault, your auto insurance will pay for the damages. In the case where the driver of another vehicle caused the accident, the insurer will try to recover the costs from their insurer. If this claim is successful, the deductible will be refunded to you.

Comprehensive Insurance

Comprehensive auto insurance covers you against theft or damage to your vehicle that was not caused by a collision. This could be damage caused by:

  • Fire
  • Hail
  • Floods
  • Falling objects
  • Contact with animals, like a deer
  • Explosions
  • Earthquake
  • Public violence (riot)
  • Windscreen damage.

Uninsured or Underinsured Motorist Insurance

If your vehicle is struck by another and the owner of that vehicle does not have insurance, or is insufficiently covered, your insurance will cover the damages. You are also insured for a hit-and-run.

If you are hit by an uninsured vehicle, as a pedestrian, uninsured auto insurance will pay for your medical costs.