Different Types of Auto Insurance Coverage in USA


Almost every state in the USA is considering making it mandatory to purchase and maintain auto insurance to drive legally. This is often termed as “maintaining financial responsibility on your vehicles.” In some states like Pennsylvania, a lapsed insurance coverage may result into suspension of vehicle registration privilege for at least 3 months. Having the right car insurance may prevent you from suffering huge financial loss in the event of accident, be it anybody’s fault. For states, which have made it mandatory in commonwealth to have auto car insurance, there are certain coverage benefits that are necessary, while others are optional.

Mandatory Auto Insurance Coverage

Medical benefits or personal injury – Regardless of who is at fault for auto collision, such coverage benefit will help you pay for the medical bills, covering personal injury or to that of others in the vehicle at the time of the accident. The minimum limit can be $5,000, going higher to any limit that you choose.

Property damage liability – If you are at fault for damaging third party property in car accidents, this type of coverage pays for the cost. The minimum limit can be $5,000.

Third party injury liability – If someone gets injured in car accident and you are at fault, this coverage pays for their medical and rehabilitation expenses, and also includes any damage for which you are liable.

Full or limited tort – In USA, insurance carriers offer choices in having full or limited tort coverage. The latter enables you to save on your premiums, while you are able to recover out-of-pocket medical and other expenses, except certain damages. Full tort coverage provides you unrestricted right to file suit against any negligent party for your damages.

Optional Coverage

Auto insurance carriers offer a wide range of optional coverage benefits, which include:

Uninsured motorist – This coverage is applicable to you, your family or any other person in your car for bodily injuries if you are hit by an at-fault uninsured driver.

Underinsured motorist – This type of coverage is applicable only for bodily injuries caused due to an at-fault motorist who does not have enough insurance to cover your claims.

Income loss – Such form of auto insurance coverage pays a part of your lost wages when you sustain injuries in an accident that keeps you from working.

Accidental death benefit – Such coverage benefit is paid to personal representative of the insured if bodily injuries from car accident cause death within 24 months of the date of accident.

Collision – This coverage benefit pays for repairing damage to the car as results of an accident.

Comprehensive – This pays for theft or damage to your vehicle due to flood, fire, vandalism, or striking an animal.

Having a comprehensive view of different types of auto insurance coverage in USA will help you make the right choice.