How coverages work
Basic car insurance coverages typically fall into three categories:
- Coverages that protect your car (of course)
- Coverages that protect you and your passengers (medical)
- Coverages that protect your wallet (liability)
Some are required. Some are optional. All are extremely important to consider.
Coverages that protect your car
When your car's out of commission, it can feel like your whole life is out of commission. The following "car coverages" are designed to help you get back on the road — and back to normal — as quickly as possible.
Coverages that protect you & your passengers
Medical coverages can help pay for … well, medical expenses for you and your passengers after a covered accident. And medical expenses can be … expensive.
Coverages that protect your wallet
Liability can help pay for damaged property, medical care, and lost wages for other drivers and passengers if you're found at fault in an accident.
Each state sets its own minimum limits that drivers must have on their car insurance policies. These minimums are typically expressed in a 3-tier system: 25/50/15, for example. Here's what these numbers mean:
- 25: The max amount (in thousands) the insurance company will pay toward injury-related expenses per person
- 50: The max amount the insurance company will pay toward injury-related expenses per incident
- 15: The max amount the insurance company will pay for property damage for each incident
This might seem confusing but don't worry. When you buy your policy, you won't be able to select limits below your state's legal requirements. You can always set limits that are higher.