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Personal - Auto Policy

What is a personal auto insurance?


Auto insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy. Auto insurance provides property, liability and medical coverage. NY Minimum 25/50/10. An auto insurance policy is comprised of six different kinds of coverage. Most states require you to buy some, but not all, of these coverages. If you're financing a car, your lender may also have requirements. Remember each coverage is priced separately.

 


1. Bodily Injury Liability - Bodily Injury Liability covers the costs associated with injuries to other people if you're found legally responsible for a car accident.

What it covers?

  • Medical expenses (hospital bills, rehab, etc.)
  • Lost wages (if the injured party can't work)
  • Pain and suffering
  • Legal defense costs (if you're sued)

 

What it doesn't cover:
  • Your own injuries (that's covered under Medical Payments or Personal Injury Protection, depending on the state)
  • Damage to your car or other property (covered under Property Damage Liability or Collision)

 

Is it required?

Yes. Bodily Injury Liability is required in most U.S. states. Each state sets its minimum required limits, for example:

  • California: $15,000 per person / $30,000 per accident
  • New York: $25,000 / $50,000
  • Florida: Not required (Florida is a no-fault state, but requires PIP)

These are minimums, and they're often not enough to fully protect you in a serious accident. Many experts recommend higher limits, such as $100,000/$300,000 or more.
Why is matters? If you cause an accident and the injuries exceed your BIL limits, you could be sued for the difference out of pocket. This can put your savings, home, or future wages at risk.



2. Medical Payments or Personal Injury Protection (PIP) - Both coverages help pay for injuries to you and your passengers, regardless of who was at fault in an accident. However, there are important differences between them.

 

Medical Payments what it covers?

  • Your medical expenses (and your passengers) after a car accident, regardless of who is at fault
  • Can also cover you as a pedestrian or bicyclist hit by a car

Typical costs covered:

  • Doctor visits
  • Hospital bills
  • Surgery
  • Ambulance fees
  • X-rays and imaging
  • Funeral expenses

What it doesn't cover:

  • Lost wages
  • Rehabilitation or extended care
  • Essential services like childcare or housecleaning

 

Personal Injury Protection what it covers?

  • Everything Medical Payment covers PLUS:
  • Lost wages
  • Rehabilitation
  • Replacement services (e.g., childcare or housekeeping)
  • Sometimes funeral expenses

Which one should you choose? If you're in a no-fault state, you'll likely be required to carry PIP. In other states, MedPay is a simple, affordable add-on — but limited. You may want to carry PIP if available, especially if you don't have good health insurance, want more comprehensive protection and are worried about being unable to work after the accident.



3. Property Damage Liability - Is a core part of personal auto insurance in the U.S., and it’s required by law in almost every state. It pays for damage you cause to other people’s property in an accident where you are at fault.

What it covers?

  • Other people’s vehicles you damage in an accident
  • Structures (e.g., fences, garages, homes, light poles)
  • Personal property inside another person’s car (e.g., electronics)
  • Legal fees if you're sued for the damage

 

What it doesn't cover:

  • Damage to your own car (that’s covered under collision insurance)
  • Your own property or belongings
  • Intentional damage
Is it required? Yes - almost all states require a minimum amount of PD Liability coverage. For example: California: $5,000, Texas: $25,000 and Florida: $10,000. These minimums are often too low for real-world accidents. Repairing or replacing even one newer vehicle can easily cost more than $25,000. Most experts recommend at least $50,000–$100,000 in PD Liability coverage, especially if you drive frequently, live in an area with expensive vehicles or property and want to protect your finances in case of a lawsuit.



4. Collision Coverage - pays to repair or replace your own vehicle if it’s damaged in an accident — regardless of who is at fault.

What it covers?

  • Collisions with another vehicle (even if you’re at fault)
  • Single-car accidents (e.g., hitting a tree, pole, or wall)
  • Rollovers
  • Hit-and-run damage (if not covered by uninsured motorist property damage)

 

What it doesn't cover:

  • Damage to someone else’s car (that’s Property Damage Liability)
  • Theft, vandalism, flood, fire, or falling objects (that’s Comprehensive coverage)
  • Medical bills (that’s MedPay, PIP, or Bodily Injury Liability)
  • Normal wear and tear or mechanical failure

Collision comes with a deductible, usually between $250 and $1,000. You pay this amount out of pocket, and insurance covers the rest. Higher deductible = lower premium (but more out-of-pocket cost if you file a claim). Is it required? Not required by state law, but required by lenders if you lease or finance your vehicle. Optional if you own your car outright. You should consider collision coverage if your car is newer or valuable, can't afford to repair or replace your car out of pocket or you're financing or leasing. You might skip it if your car is old and not worth much. The annual premium + deductible exceeds the car’s value.



5. Comprehensive Coverage - pays to repair or replace your vehicle if it’s damaged or lost due to events not involving a crash with another vehicle.

What it covers?

  • Theft of your car
  • Vandalism
  • Fire
  • Natural disasters (hail, flood, tornado, hurricane)
  • Falling objects (tree branches, debris)
  • Animal collisions (e.g., hitting a deer)
  • Glass breakage (like a cracked windshield)

 

What it doesn't cover:

  • Collision with another car or object (that's collision coverage)
  • Your medical expenses (that's MedPay, PIP, or Bodily Injury Liability)
  • Other people’s property damage (that’s Property Damage Liability)
  • Normal wear and tear or mechanical failures

Comes with a deductible, typically $250–$1,000. You pay the deductible first, then insurance covers the rest. Higher deductible = lower premium, but more out-of-pocket cost in a claim. Is it required? Not required by law. Required by lenders if your car is leased or financed. Optional if you own your car outright. You should consider comprehensive coverage if your car is new or valuable. You live in an area prone to theft, storms, or wildlife want full protection against unexpected, non-crash events.  You might skip it if your car is old or not worth much or you can afford to replace it yourself if it’s stolen or totaled.


6. Uninsured and Underinsured Motorist Coverage - This coverage are important protections in a personal auto insurance policy that help you and your passengers if you're hit by someone who doesn't have enough insurance or none at all. These coverages step in to pay for your injuries (and sometimes property damage) when the at-fault driver can’t.

Uninsured Motorist (UM)covers you if the at-fault driver:

  • Has no insurance at all
  • Commits a hit-and-run
  • Has canceled or lapsed coverage

Underinsured Motorist (UIM)covers you if the at-fault driver:

  • Has insurance, but not enough to cover your injuries or damage

What it covers?

UM/UIM Bodily Injury:

  • Medical bills
  • Lost wages
  • Pain and suffering
  • Funeral expenses

UM/UIM Property Damage (in some States):

  • Repairs to your vehicle
  • Damage to property inside your car

Not all states offer or require UMPD (Uninsured Motorist Property Damage.) 

Uninsured and Underinsured Motorist Coverage offers critical financial protection in situations where you're injured by a driver who lacks adequate insurance. While it may be optional in some states, this coverage ensures that you and your passengers are not left bearing the financial burden of someone else’s negligence. It's a valuable addition to any auto insurance policy and a smart investment in your personal safety and peace of mind.