An auto insurance policy generally consists of several kinds of coverage’s and will vary by state. A general description of the coverage’s are as follows:
- Bodily injury liability: for injuries the policyholder causes to someone else. This coverage also pays legal defense and court costs.
- Medical, or in some states, Personal Injury Protection (PIP) for treatment of injuries to covered persons. At its broadest, PIP can cover medical payments, lost wages and the cost of replacing services normally performed by someone injured in an auto accident.
- Property damage liability, for damage the policyholder caused to someone else’s property.
- Collision, for damage to the policyholder’s car from a collision with another vehicle, an object or a vehicle rollover.
- Comprehensive, for damage to the policyholder’s car that doesn’t involve a collision with another car, object or vehicle rollover. Covered risks may include fire, theft, falling objects, flood, hail and hitting an animal.
- Uninsured motorists coverage, which pays for damages when a covered person is injured in an auto accident caused by a driver who does not have Liability insurance. The application of this coverage will vary by State.
No state requires car owners to carry insurance for all these risks. But many states require drivers to carry minimum amount of liability insurance for bodily injury and property damage, as well as personal injury protection coverage.
In New York, the limits required by law for automobile insurance are 25/50/10. The first two figures refer to bodily injury liability and the third figure to property damage liability. For example, $50,000 for all persons injured in a single accident, subject to a limit of $25,000 for one individual, and $10,000 coverage for property damage.