Understanding the Types of Car Insurance Coverage

Car insurance is a necessary evil: it can be frustrating to pay insurance premiums every month, but you’ll be glad you have insurance in the event of a car accident.

That said, choosing car insurance coverage can be confusing. There are several different types of coverage, with some coverage required by the state and others optional. How much coverage do you need? What can you safely skip?

The car accident attorneys at Casper & Casper are here to help you. Below, we’ve explained the different types of coverage and why you might need (or not need) each type.

Bodily Injury Liability Coverage

This type of coverage pays for the medical expenses of people injured in a car accident in which you’re at fault—i.e. the injuries you are legally liable for. This does not cover any injuries you or your passengers sustain in the accident. Bodily injury liability coverage lists two numbers: the maximum amount of coverage provided for one person’s injuries and the amount provided for two or more people’s injuries. For example, a 25/50 policy would pay a maximum of $25,000 for one person’s injuries and $50,000 for the injuries of everyone in the other car.

Bodily injury liability coverage is required in Ohio in order to legally drive. The minimum amount required is $25,000 for one person and $50,000 for all occupants of the other car. However, it’s a good idea to get a policy that offers more than the minimum coverage. This is because medical bills can be extremely expensive. If you hit another car and the other driver sustains serious injuries, you will be responsible for all expenses above the amount of coverage.

Property Damage Liability

Property damage liability coverage pays for damage to the other driver’s car as well as any other collateral damage resulting from the accident, such as damage to fences, guardrails, telephone poles, houses, etc. It does not pay for damage to your own car. It is often listed along with bodily injury liability as the third number: for example 25/50/10.

Like bodily injury liability coverage, this type of coverage is required in Ohio. The minimum is $25,000.

Medical Payments or Personal Injury Protection (PIP)

Medical payments and PIP differ slightly, but both cover the medical expenses of you and your passengers after an accident causing injuries. In addition to medical costs, PIP also covers lost wages (if you or your passengers have to take time off work) and funeral costs.

This type of coverage can cause a lot of confusion: to many people with health insurance, it seems redundant. However, you might want to consider MedPay or PIP as a supplement to your health insurance. Some policies allow you to pay your health insurance deductible or copays with MedPay, which typically doesn’t have copays. (Check with your auto insurance company to see if this applies.) You may also decide to have both MedPay and PIP, depending on your budget and needs.

MedPay and PIP are not required in the state of Ohio.

Collision

Collision coverage pays for the damage to your car, whether that damage was done by another car, structure, or even potholes. This type of coverage pays for the damage regardless of fault.

Collision coverage is typically sold with a deductible: this is the amount you pay before your insurance kicks in. Deductibles range from $0 to $1,000. Generally, the higher your deductible, the lower your monthly premium. When choosing a policy, you will want to take into account your monthly budget, emergency savings, and whether or not your car is worth repairing. Paying a low premium can be attractive, but you must also be prepared to potentially spend a high lump sum in car repairs down the road.

This type of coverage is not required in Ohio.

Comprehensive

Comprehensive coverage is similar to collision coverage, but—like the name suggests—it covers more. This type of coverage pays for damage done to your car by something other than a collision, such as theft, vandalism, contact with animals, and natural disasters. It also covers cracked and broken windshields.

Comprehensive coverage is offered with a deductible. The lower the deductible is, the higher the monthly premium will be.

This coverage is optional in Ohio.

Uninsured or Underinsured Motorist Coverage

Uninsured motorist coverage covers your medical expenses and car repair costs in the event that you are in an accident with an uninsured or hit-and-run driver. Underinsured motorist coverage will pay the excess if the other driver’s insurance will not cover all of your expenses. (For example, underinsured motorist coverage would kick in if your medical expenses totaled $30,000 but the driver’s bodily liability coverage only payed $25,000.)

Although this coverage isn’t required in Ohio, we strongly recommend that you include it in your auto insurance policy. About one in eight drivers are uninsured in the country. If you are in an accident with an uninsured driver, you’ll be on the hook for all your medical expenses and car repairs, including copays and deductibles. While you can file a suit against the at-fault driver to recoup your losses, it is unfortunately very difficult: it may take a long time to see any money, and many of the drivers who skipped insurance did so because they didn’t have any money to buy it.

Rental Car Reimbursement

Rental car reimbursement is an add-on to your insurance policy. This type of coverage pays you back for the cost of a rental car while your car is being repaired after an accident.

This coverage is optional. Still, it can be good to add, as the coverage is relatively inexpensive and the costs of a rental car can quickly come to hundreds of dollars.

If you’ve been in a car accident caused by another driver, contact us for a free consultation. We would be happy to answer your questions about getting the compensation you need to recover from a car accident.

Sources:
– Insurance Information Institute
– iii.org
– guides.wsj.com