car insurance coverage

One of the most important (and trickiest) parts of buying car insurance is deciding how much protection to get. This page aims to clarify your options when it comes to coverage limits and explain the different types of car insurance coverage available.

car insurance coverage limits

A driver's auto insurance coverage limit denotes the maximum amount of money an insurer will contribute toward a single claim. If you have a medical payments coverage limit of $5,000 per incident, then $5,000 is the max payout you can receive through that coverage after you file a claim.

how to set your auto coverage limits

Each policy is unique, like its policyholder. So there's no universal method for choosing how high or low to set your car insurance coverage limits.

Finding the limits that work for you when you get a car insurance quote involves assessing your own finances and accident risk. Ask yourself, "Can I afford to pay accident fees out of my own pocket?"

If you have $10 million in your third-favorite checking account, you may be able to afford unforeseen and exorbitant expenses after a car accident. In that case, opting for lower limits just means you're willing to assume more of the risk each time you get behind the wheel.

If, like most people, you don't have that kind of emergency fund on standby, paying slightly higher premiums for higher coverage limits can offer a great amount of financial protection in case you're in an accident.

No matter how skilled you are behind the wheel (and we don't doubt it), accidents can and do happen. Through auto coverage limits, you can tailor your policy to protect your financial assets and provide you with much-needed peace of mind.

types of car insurance coverage

Generally speaking, auto coverages break down into 3 distinct categories: liability, vehicle-based, and medical.

Medical coverages for drivers

Medical coverages are designed to pay for the medical care of you and your passengers after an accident.

Medical payments coverage

Personal injury protection (PIP) coverage

Coverages that protect your vehicle

When your car stops running, so does your daily routine. That's why Esurance offers a slew of vehicle-based coverage options designed to help get your car or truck back on the road after an accident.

Comprehensive coverage

Collision coverage

Emergency roadside service (ERS) coverage

Rental car coverage

Loan/lease gap coverage

Customized parts and equipment coverage

Liability coverages

Liability is a type of car insurance coverage that's legally required in most states. It pays for damaged property, medical care, and lost wages for other drivers and passengers if you're found at fault in an accident.

As liability coverage is required in nearly all states, so, too, are the coverage limits that come with it. Each state sets its own minimum limits (minimum maximums) that drivers must maintain on their car insurance policies. These minimums are typically expressed in a 3-tier system: 25/50/15, for example. These numbers mean the following:

  • 25 – The maximum amount (in thousands) the insurer will contribute toward injury-related expenses per person
  • 50 – The total amount the insurer will contribute toward injury-related expenses per accident
  • 15 – The max amount the insurer will pay for property damage for each accident

When you buy your policy, you won't be able to select limits below your state's legal requirements. But you can always set limits that are higher.

Liability coverage generally breaks down into 2 main categories: bodily injury and property damage.

Bodily injury (BI) and property damage (PD) liability coverage

Liability coverage in no-fault states

Uninsured/underinsured motorist liability

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