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types of car insurance coverage

One of the most important (and trickiest) parts of buying car insurance is deciding what types of coverage to get. Check out the number of ways an Esurance policy can help protect you and your car below — and let CoverageMyWay® help you personalize your coverage options.

coverage options for your policy

Generally speaking, auto coverages break down into 3 distinct categories: liability, vehicle-based, and medical. While some are required and some are optional, all are extremely valuable protections that can help financially safeguard you. Here are the main types of auto insurance coverage you can choose.

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

Medical payments coverage, also known as medical and funeral services payments, can help cover accident-related medical expenses (including funeral expenses) for you, other drivers on your policy, and passengers. It can also offer coverage if you're struck by a car as a pedestrian or cyclist.

More on medical payments coverage >

Personal injury protection (PIP) coverage

Personal injury protection can help cover medical expenses for you and your passengers after an accident, regardless of fault. Offered (or required) in no-fault states, PIP is a complex coverage that varies widely by state. In general, it covers hospitalization, rehabilitation, other medical expenses, and (sometimes) lost wages up to the limits you select.

No-fault states restrict what drivers can and can't legally recoup from other drivers after an accident. In these states, you (and your insurer) are responsible for your own medical expenses up to a state-specific threshold.

More on PIP coverage >

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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

This coverage is for all those unpredictable elements that spring up on the road or in your driveway. Comprehensive coverage, also known as "comp" or "other than collision," can help pay for repairs (or replacement, if your car's totaled) after your car's damaged by a natural disaster, vandalism, theft, fire, or a falling tree branch.

Collision coverage

Collision coverage, together with comprehensive coverage, is a key component of what's often referred to as "full coverage." While your property damage coverage helps others repair their cars, collision is there to assist you. If you've caused an accident, collision helps to either repair damage or replace damaged parts of your car.

Comprehensive and collision coverages are not state-mandated coverages, but they may be required by a loan or leasing company.

More on comprehensive and collision coverage >

Emergency roadside service (ERS) coverage

While no one can doubt the importance of collision and comprehensive coverages, none of them spring into action until the car gets to a repair shop. In the meantime, there's still the matter of towing and other roadside service fees, which can rack up in a hurry. This is where emergency roadside service comes in.

ERS (called towing and labor coverage in some states) can be purchased on policies that have comprehensive and collision coverages. It can be a big lift to those marooned by mechanical failure or in need of maintenance like tire changes, gas fill-ups, battery jumps, etc.

More on emergency roadside coverage >

Rental car coverage

This coverage reimburses you for the cost of your rental car if your insured vehicle is in the shop or is unavailable due to an accident. You need to have comprehensive and collision on your policy in order to add rental car coverage. In certain states, Esurance offers CarMatch Rental Coverage®, which covers the rental cost of a vehicle comparable in size and body type to your regular ride.

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Loan/lease gap coverage

We all know that a car's value depreciates over time. But if you financed or leased a vehicle and have an accident that's declared a total loss, you might end up owing more to your financing or leasing company than the car is worth.

This is where loan/lease gap insurance can be a real saver.

Insurers don't determine your actual cash value (ACV) settlement based on what you owe, but rather on what the car is worth just prior to the accident. Let's say you owe $20,000 on your new Mini Cooper, but your car is now only worth about $16,000. If your car is totaled, you might get a settlement check of $16,000 but still owe an additional $4,000 on your loan or lease.

Loan/lease gap insurance (as its name suggests) helps bridge this divide between the ACV and what you still owe.

More on insurance for your loaned or leased car >

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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 incident
  • 15 — The max amount the insurer will pay for property damage for each incident

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

BI and PD liability are the basic building blocks of a typical car insurance policy. Bodily injury insurance covers medical expenses and lost wages for injured drivers or passengers, while property damage insurance covers the repairs or replacement of damaged cars and other property (e.g., a garage, fence, porch, etc.).

Liability insurance can also help defray legal fees if you're sued for further damages.

More on bodily injury and property damage coverage >

Liability coverage in no-fault states

In the states with no-fault insurance, insured drivers are typically compensated for medical expenses by their own insurers, regardless of who caused the accident. Nonetheless, BI liability coverage is still required in no-fault states because if injuries reach a certain severity, the at-fault driver may be sued by the injured party. If that happens, your BI coverage can help cover your liability expenses.

Generally speaking, property damage liability works the same in no-fault states as it does in other states. In other words, the driver found at fault is responsible for any damage caused by the accident.

Uninsured/underinsured motorist liability

There are 2 types of uninsured and underinsured motorist liability coverage: bodily injury and property damage. Both are designed to protect you, financially, from drivers with minimal or no coverage. Some states require drivers to have some form of this coverage. In other states, it's an option.

Uninsured motorist bodily injury liability coverage can help pay for medical expenses and lost wages of policyholders, authorized drivers, and passengers when the accident-causing driver is uninsured.

Underinsured coverage works similarly to uninsured insurance, except this coverage steps in when the at-fault driver's liability limits aren't enough to cover your post-accident expenses.

Uninsured/underinsured motorist property damage coverage helps pay for your car's repairs if the at-fault driver doesn't have enough of the required property damage coverage or if they are uninsured.

More on uninsured/underinsured motorist coverage >

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