Understanding the primary components of an auto insurance policy ensures you carry adequate financial protection without paying for redundant coverages.

1. Bodily Injury & Property Damage Liability

Liability coverage pays for third-party injuries and property damages when you are legally at fault in an accident. Coverage limits are expressed as three numbers (e.g., 100/300/100):

• $100,000 Bodily Injury per Person: Maximum payout for medical expenses and lost wages for a single injured party.
• $300,000 Bodily Injury per Accident: Total aggregate payout for all injured parties in a single collision.
• $100,000 Property Damage: Maximum payout for repairing or replacing third-party vehicles, guardrails, or structures.

2. Collision Coverage vs. Comprehensive Coverage

While liability covers other drivers, collision and comprehensive protect your own vehicle:

• Collision: Pays to repair your vehicle after an impact with another car, tree, guardrail, or rollover event, subject to your chosen deductible ($500 or $1,000).
• Comprehensive (Other Than Collision): Covers vehicle damage from non-collision perils including animal strikes, hail, windstorms, falling trees, vandalism, and vehicle theft.

3. Uninsured / Underinsured Motorist (UM/UIM)

With an estimated 14% of US motorists driving without insurance, UM/UIM coverage is vital. It steps into the shoes of the at-fault driver to pay your medical bills and property damage if they lack sufficient liability coverage.