What coverages are optional and what are required?


There are a bunch of different car insurance coverages that different car insurance companies offer to their customers and car insurance policy holders. Some of these car insurance coverages are required by the law in different states. Those should be included in a car insurance policy, and also some which are optional, not mandated by the law but are still highly suggested to motorists for added protection.

First what are these car insurance coverages that are required by the law in almost every state in the United States?

The car insurance coverages that are frequently required by the law in every state are the following: Personal Injury Protection Coverage, Liability Coverage, and Uninsured/ Underinsured Motorist Coverage.

Personal Injury Protection Coverage or simply PIP Coverage is for medical and rehabilitation expenses and also for lost wages. People that can be covered or insured by PIP coverage are the policy holder and all passengers inside the policy holder’s vehicle.

Liability Coverage, which is the combination of Bodily Injury Coverage and Personal Property Coverage, is designed to insure the policy holder from all medical expenses that are suffered by the other party’s driver and passengers, and the also the cost of property repair or the other party’s property or car, that are involved in the accident assuming that the policy holder is at fault.

Uninsured/ Underinsured Motorist Coverage insures the policy holder and all his/her passengers if in case they got involved in an accident. Typically a hit-and-run accident, where in the other driver who is at fault is either uninsured or if insured has only minimal amount of coverage

Aside from these frequently required car insurance coverages, are optional car insurance coverage that policy holders could have as add-ons or additional protection for themselves, their family, and their property. These optional car insurance coverages or add-on coverages are the following: Additional PIP Coverage, Supplementary Uninsured/Underinsured Motorist Coverage, Collision Coverage, Comprehensive Coverage, Accidental Death and Dismemberment (AD&D) Coverage, Gap Coverage, Supplemental Spousal Liability Coverage, and Other/Miscellaneous Coverages.

Additional PIP Coverage and Supplemental Uninsured/Underinsured Motorist (SUM) Coverages are obviously, as their names suggest, are additional or supplemental amounts for the existing PIP Coverage and Uninsured/ Underinsured Motorist Coverage. Additional amounts for additional benefits.

Collision Coverage are for damages incurred by the policy holder’s car aside from accidents that are caused by collision. It can be collision with another car or any non moving object, like light post, fire hydrant, etc.

Comprehensive Coverage is for the protection on the policy holder’s property from theft, fire, flood and other natural calamity, vandalism, falling object, etc.

Accidental Death and Dismemberment (AD&D) Coverage will pay a policy holder, his/her family members, or other occupants of his/her car, an amount for certain serious injuries or death caused by an accident while inside the policy holder’s car.

Gap Coverage will pay for gap amounts, or the difference between the actual cash value or ACV of the car and the amount that will be paid by the car insurance company either under Collision Coverage or Comprehensive Coverage, if in case the policy holder’s car is deemed a total loss.

Supplemental Spousal Liability Coverage is an add-on coverage that will insure the policy holder’s spouse if in case of accident. This is because some liability coverage that insures for the policy holder’s passenger sometimes does not insure the policy holder’s spouse.

Other/Miscellaneous Coverages are sometimes offered by some car insurance companies that includes Towing and Labor Coverage, Extended Transportation Coverage (Rental Reimbursement) and Mechanical Breakdown Coverage.