Auto Insurance Basics -- What Is Covered

Every person should understand the four basic types of coverage an auto policy might provide: (1) liability; (2) collision or comprehensive; (3) uninsured/underinsured motorist; and (4) medical payments. 

Below are simple descriptions of each.  Your policy's declarations page should list what kind and how much of each coverage you have.  

Liability

This applies when someone else claims you hurt them or damaged their property while you were driving.  At least in Virginia, every policy includes this kind of coverage.  If you face such a claim, and it is covered, your carrier will provide a lawyer to defend you and pay any verdict up to policy limits.  They may also pay to settle the case before a trial or on appeal.

Collision (or Comprehensive)

The pays for damage to your own insured car when either you are at fault or nobody is at fault.  Usually, it involves a deductible.  Not every policy includes collision coverage.

Uninsured (or Underinsured) Motorist

When the person that hits you can't be identified, or when they do not have available insurance for nearly any reason, your uninsured motorist (UM) coverage can pay for harm to you, your family, and your passengers, as well as for property damage.

Perhaps the most intricate type of insurance, UM coverage can apply -- or not apply -- in surprising ways.  It also applies when the person who hurt you has less insurance than the UM limits on your declarations page (hence, the underinsured motorist aspect). 

Medical Payments (or Medpay)

This coverage pays for you and your household's medical bills if you are hurt by a car (even while a pedestrian).  It can also pay bills for those hurt in your car, regardless of who might be at fault.  The amounts are smaller than for liability coverage (typically $2,000 multiplied by the number of cars on the policy), but it is often easier to access.  Moreover, other insurance companies typically do not get credit for the amounts that you get from MedPay.

You can get other insurance, too, such as rental car coverage, but the above four are the most important to understand. 

Liability, UM, and MedPay coverage will each be addressed in upcoming articles on this site.  Look for them.