Auto Insurance 101: What Each Coverage Type Actually Means

Shopping for auto insurance can feel overwhelming if you’re not familiar with the terminology. Whether you’re renewing your policy or buying coverage for the first time, understanding what each type of coverage actually means can help you make smarter choices for your budget and your vehicle.

Liability Coverage

Liability insurance is typically required by law and covers damage or injuries you cause to others in an accident.

• Bodily injury liability may help pay for medical expenses, legal fees or lost wages for other people involved.

• Property damage liability may cover repairs to someone else’s vehicle or property.

This coverage does not protect your own vehicle.

Collision Coverage

Collision insurance helps cover the cost of repairing or replacing your own car after a crash, regardless of who’s at fault. This is especially useful for newer vehicles or if you’re still paying off a loan or lease.

Comprehensive Coverage

Comprehensive insurance steps in when something other than a collision damages your vehicle. That includes incidents such as theft, fire, hail, vandalism or hitting an animal on the road.

Uninsured/Underinsured Motorist Coverage

If you’re hit by a driver with little or no insurance, this type of coverage can help pay for your medical expenses and vehicle repairs. It’s particularly important in areas where uninsured drivers are more common.

Personal Injury Protection (PIP) or Medical Payments

Depending on state regulations, this coverage may help pay for your own medical bills after an accident, regardless of fault.

Need Help Decoding Your Policy?

If you’re unsure which coverages make sense for your needs, Pan American Insurance is here to help. We work with drivers in El Paso, 0 to break down coverage options in plain language and find the right policy for your situation. Contact us today to get started.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.