Last updated: October 2023
Choosing from the many car insurance coverage and plan options out there can seem daunting, but when you know what you need, it can make getting what’s right for you a little easier.
Basic Auto Policy Types
The type and amount of auto insurance coverage you purchase depends on your needs and the laws where you live. Many states require you to have a minimum amount of liability coverage. Certain states also require you to keep personal injury protection (PIP) and/or uninsured motorist coverage. The basic coverages are summarized below but always look to your policy for a full explanation of what is covered.
Liability insurance pays for bodily injuries or property damage suffered by others when you are at fault in a vehicle accident. As defined by your state, you’re required to carry at least the minimum limits for liability insurance. General rule of thumb is that you should carry liability limits in an amount equal to the value of your personal assets – so consider the value of your home, your car, and your bank account(s). Here’s a simple explanation of the two components of liability insurance: bodily injury and property damage coverage.
Bodily Injury Liability
Bodily injury liability pays for medical and legal protection should you cause bodily injury to another person while operating your vehicle.
Property Damage Liability
Property damage liability pays for damage to another's property caused while operating your vehicle.
Comprehensive & Collision Coverage
Have you ever seen tree branches bend and break under the weight of wet snow? Has your car ever surprised you by slipping and sliding on a patch of black ice? Have you considered how you’d pay for damage to your vehicle if you cause a collision? Driving conditions can be unpredictable, which is why it could be a good idea to consider adding comp & collision insurance protection that pays for damages to your car too.
Comprehensive coverage pays for loss or damage to your covered vehicle caused by an event other than collision, such as fire, theft, natural disaster, contact with birds or animals, and vandalism. This type of coverage would come in handy if a large tree branch fell onto your insured vehicle or you collided with a deer late one night.
Collision coverage pays for loss or damage to your vehicle as a result of colliding with another object, a “hit and run”, or the vehicle overturning. This type of coverage would come in handy if you slid into your mailbox leaving the driveway one icy morning.
Personal Injury Protection (PIP)
In states with no-fault auto insurance coverage, PIP pays, within state specified limits, for certain medical, hospital, funeral and/or work loss expenses incurred by you and other passengers in your covered vehicle after an accident regardless of fault. PIP also covers you if you’re injured as a passenger in a vehicle, as a rider of public transportation, or as a cyclist or pedestrian who’s been struck by a vehicle.
Uninsured Motorist Coverage
Suppose you’re driving down the road, and out of nowhere, a car runs a stop sign and collides with your vehicle. You collect yourself, get out of the vehicle, and prepare to exchange information with the other driver. When the topic of insurance comes up, you learn the driver who hit you is uninsured. In a scenario like this, uninsured/underinsured motorist insurance, offers financial protection.
Uninsured motorist coverage helps cover your costs if you are hit by someone without insurance, or who has minimal coverage. This coverage also protects you in cases of hit and run. It pays for bodily injury, and, in certain states, property damage sustained by you and other passengers in your covered vehicle in an accident for which the person legally liable does not have auto liability insurance or cannot be identified. In some states it also includes auto coverage for damages caused by at-fault drivers who have insufficient insurance to pay your claim. If uninsured motorist coverage is an option in your state, you may want to consider adding this coverage to your policy.
Please note: While in many states only liability coverage is required, certain states also require you to carry uninsured/underinsured motorist coverage. Make sure to check your state’s insurance laws before driving.
More Coverage & Plan Options
Besides the basic auto insurance coverages, there are additional coverage and plan options that you can choose to further protect yourself and your vehicle. For an additional cost, these options can give drivers added peace of mind on the road.
Rental reimbursement is coverage that helps pay for a rental car if your vehicle can't be driven due to a covered accident or loss. Typically, this coverage can only be purchased if you also purchase comprehensive and collision coverage.
Suppose you’re involved in an accident, and while you’ve escaped with only a few bumps and bruises, your car needs major repairs. What are you supposed to do while the repair shop fixes the smashed side of your car? How do you get to work or school?
Some people may have access to another vehicle. For example, your spouse might be able to drop you off at the office before they head to their job in their car. But for some people, this isn’t an option. If you live alone or only have one car in your household, being without your vehicle can cause serious stress and complicate basic tasks.
With rental reimbursement coverage, you don’t have to worry! In the event your car can’t be driven due to a covered accident or loss, rental reimbursement coverage helps cover the cost of a rental car. You’ll be able to cruise around with less financial stress until your car is restored to its pre-accident glory.
You’ll typically have the option to purchase towing and labor coverage if you also purchase collision and comprehensive. It helps cover emergency towing costs (up to the limit selected) when your covered auto cannot be driven after an accident or suffers a mechanical breakdown. It also helps cover labor costs for required repairs at the shop where you tow your vehicle.
Driving is wildly unpredictable. You can take your car for a tune-up and end up with a flat tire on the way home. You might rush out the door after breakfast to make your morning meeting before discovering a dead battery. No matter the reason, feeling stranded can be scary and frustrating.
This is where roadside assistance can come to the rescue! If you choose to pay for a roadside assistance plan, you’ll have access to services that can save you from sitting and waiting on the side of the road for a kind soul to help you out. Instead, you’ll have a trained professional headed your way as soon as possible.
Roadside assistance plans are not insurance and look different depending on the service provider, but take the plan offered by Direct Auto as an example of services you might expect:
- If you’re stuck with a car that can’t be driven, you can get emergency towing 24/7.
- If you run out of gas and are stuck on the side of the highway, you can have gasoline or other essential fluids delivered to you.
- Lock your keys in your car? These plans typically come with lost key and lockout service.
- Accidentally leave your car’s lights on? You can call to have someone jump-start your battery.
- Have an unknown issue? You can call your roadside assistance for mechanical help to get you going.
- If you prefer to travel the old-fashioned way, you can request maps or travel routes with concierge benefits.
With roadside assistance, you can rest easy because you know help will come when something goes wrong, and you know that you’ll be back on your way as quickly as possible. Also, if you end up calling for help a few times, your plan has likely paid for itself because one-off service fees can be expensive.
After you purchase a new vehicle, its value depletes up to 30 percent in the first three months you own the vehicle. If you get into an accident, or your car gets totaled, your insurance company may not reimburse you for the full value of the vehicle. Gap coverage insures your vehicle during this period.
Emergency Protection Plan
After a car accident, you’re probably used to paying for certain expenses, like car repairs or doctor visits. However, sometimes, unexpected bills can strain your finances. For example, what if you’re stuck in the hospital recovering for a few days and must pay someone to watch your children?
Direct Auto offers an Emergency Protection Plan that can help with these unplanned expenses. While the plan itself is not insurance and plans vary from state to state, they typically include:
- A hospital stay benefit
- Accident medical expense reimbursement
- Accidental death and dismemberment coverage
- Ambulance assistance
- Mechanical first aid
- Auto rental reimbursement & lost personal effects coverage
In addition to help after an accident, the Emergency Protection Plan offered by Direct Auto includes valuable trip planning services and travel discounts, as well.
Medical Payments Auto Coverage
Often referred to as “Med Pay,” this special type of coverage can help pay for medical, hospital, or funeral expenses incurred by you and certain others insured under your policy as a result of bodily injury or death caused by an auto accident. Anyone who is insured under your policy would be eligible to receive funds, regardless of who is at fault in the collision.
If you (or a friend or a family member), have ever been in a bad car accident, you’re aware that medical bills can add up in a hurry. Having a little extra financial security in such cases can be a big relief, which is why medical payments coverage might be a good option to consider.
Need another reason to consider medical payments coverage? It typically travels with you. In other words, whether you’re walking down the street, cruising around town in your friend’s car, or taking the city bus, you’ll be covered if you suffer injuries caused by an auto accident.
Please note: While in many states only liability coverage is required, some states also require you to carry Med Pay. Make sure to check your state’s insurance laws before driving.
Accidental Death Coverage or Accidental Death & Dismemberment Coverage
Accidental death coverage (the name and coverage details can vary slightly depending on where you live) pays a $5,000 death benefit to your beneficiaries if you were to die as a result of a covered accident in your vehicle. This payout can help your family with unexpected financial challenges such as funeral expenses or other post-death obligations. A few thousand dollars might not seem like much, but it can mean the world to your loved ones.
If you have more questions, or would like to choose the auto coverage that fits your needs, visit one of our Direct agents at a local store, visit us online for a free quote or call us at 1-877-GO-DIRECT (1-877-463-4732).
All insurance coverages, features, benefits and discounts are subject to the individual carrier’s terms, conditions, deductibles, and exclusions and may not be available in all states.
Roadside Assistance and Emergency Protection Plans offered by Direct Auto Insurance are not insurance and are administered through Nation Safe Driver, Boca Raton, FL. Not all benefits available in all states.