Car Insurance Information Center There are a few things to know about car insurance that will help you save money on your car insurance costs. First, you need to know what you need and what you can buy. See below for a quick description of most of the available coverages: Liability Insurance is coverage that protects you from the cost of accidental damage you cause to others and their property while driving a car. This covers the cost of medical bills, general and special damages you cause to others – it does not cover your damages (but see collision, medical/PIP, and uninsured coveraged below). Liability insurance coverage is usually listed with limits for bodily injury and property damage stated separately. For example, a 15/30/10 liability policy offers coverage up to $15,000 to one person for bodily injury, $30,000 for all bodily injuries to others, and up to $10,000 for coverage of property damage. Every state requires drivers to have a minimum liability coverage – but that may not be enough to protect you from being sued for the damages not covered by your car insurance policy. See advice on what kind and how much car insurance coverage you really need. Collision Insurance covers damage to your car, regardless of who caused the damage. So, even if you caused the accident, it will cover repairs to your car. Collision coverage only covers the repairs to your car up to the value of your car at the time just before the accident. If your car is worth less than the cost to repair it after an accident (commonly referred to as “totaled”), a collision insurance policy will pay you the value of your car. No states require that you have this coverage – but you may need it for other reasons (car loan or lease.) For tips on how to save money on this coverage, check out Cheap Full Coverage Car Insurance and other advice on what kind and how much car insurance coverage you really need. Comprehensive Insurance is for other damage to your car not caused while operating your car, like fire, theft, or hitting an animal on the road. No state requires it but you may want to consider it or need it for other reasons – when your lender or car lease requires it. You can save money on this comprehensive insurance by getting a policy with a deductable. See more advice on what kind and how much car insurance coverage you really need. Uninsured or Underinsured Motorist Protection can help you cover yourself in the event of an accident in which the at-fault driver has no insurance or inadequate insurance. Only a few states require it. This coverage is often an overlooked but important part of car insurance. See more advice on what kind and how much car insurance coverage you really need. Medical (Medpay) provides coverage for medical care caused by injuries to you or your passengers after a car accident. You or your passengers can make a claim to pay you medical bills resulting from an accident, even if it is not your fault. Depending on what state you are in, you may be required to have medpay coverage. Personal Injury Protection, also known as PIP, is similar to medpay but operate very differently depending on the state you are in. In some states, usually states with no fault coverage, PIP is mandatory. PIP generally covers medical care but also may cover lost wages up to a specified amount. But in some states, if you make a claim against PIP insurance, you may be waiving your right to recover against the liability portion of the car insurance. So get to know your state’s requirements in the State Overview on this website. See more advice on what kind and how much car insurance coverage you really need. Rental Reimbursement is a separate car insurance coverage that pays for renting a car when your car is inoperable due to a car accident. This coverage will specify the daily allowances or limits for car rentals which can vary by each insurance company or state. Gap Insurance is insurance to cover the difference between the cost to repair your car and the amount you owe on your car, also known as the “gap”. If you have a loan or lease, you may want to consider gap insurance. Generally, this type of insurance is sold at the time you are financing your can loan or lease. Some lenders may require you to have it to be eligible for a car loan. See more advice on what kind and how much car insurance coverage you really need. New-Car Replacement Insurance provides coverage for a new model year car replacement if your new or newer car is totaled in an accident. Many car insurance companies offer you new-car replacement insurance within a year of purchasing a new car and if the car is in its first 15,000 miles. With new-car replacement insurance, your insurance company will pay you for the current value of an equivalent new vehicle. This is different from gap insurance in that gap insurance only covered the difference between the value of your car at the time of the accident (without damage) and the amount of your loan. See more detail on this coverage in Car Insurance Types and get more advice on what kind and how much car insurance coverage you really need.