What do car insurance policies cover?

Is the thought of selecting an auto insurance policy enough to make your eyes glaze over?

Don’t feel bad — understanding the different policy types, coverage amounts and potential additions can be a challenge, even for a pro.

But if you’re in an accident, having the right policy can mean the difference between a minor inconvenience and real financial troubles. So it’s important to understand the basics.

What do car insurance policies cover?

What Different Policy Types Cover

If you’re determined at fault for an accident:

  • “Property damage liability” covers the repair or replacement costs of any property damaged in the accident (e.g., vehicles and fences).
  • “Bodily injury liability” covers the associated medical costs of other parties involved in the accident.


If you’re not at fault for the accident: 

  • “Under/uninsured motorist” makes up any costs that the at-fault driver can’t cover, including medical and vehicle repair costs.
  • “Comprehensive” coverage insures you against any damage that may occur when you’re not driving the vehicle (e.g., theft, vandalism or weather damage).
  • “Collision” covers repair or replacement costs associated with striking a static object, like a curb, fence or tree.


These policies aren’t required and may not be worthwhile for older vehicles close in value to policy deductibles. (Some leaseholders and lenders may require collision insurance.)

“Personal injury” helps cover the costs of medical expenses if you (or your passengers) are injured in the accident. Some policies also cover associated expenses, such as lost wages and funeral costs. This coverage is required in no-fault states.

What Isn’t Covered

Auto insurance doesn’t typically cover:

  • Repair costs associated with routine wear and tear. 
  • Damages caused or incurred while driving for fares (ride-sharing).
  • Exotic, performance or vintage vehicles, which often require specialty policies.
  • Coverage for roadside assistance, rental reimbursement and new car replacement (which may be obtained at an additional cost).

Remember, coverage requirements and minimums can vary, so do your research and always consult with a trusted provider.

Do you need work done on your vehicle? Reach out today.

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