Does auto insurance cover the car or the person?

Since this tree certainly didn't carry its own insurance, we hope the driver had comprehensive coverage (which applies to the car). See more car safety pictures.

Just like cars themselves, car insurance comes in all shapes and sizes. And it's a good thing, too -- in the U.S., it's required by law in 47 states, so you might as well have options. But what do those options cover: the car or the person? Well, both. In this article, we'll explore exactly which kinds of auto insurance apply to what.

Auto insurance is sold in packages consisting of different types of coverage. Some apply to your car, such as comprehensive coverage, which includes coverage for non-accident–related damages ranging from theft to natural disasters to vandalism [source: Kiplinger]. That means if your brother's car breaks down and you let him take yours to work, your car is still covered -- even though you're not driving it. In this case, your brother -- or anyone else you give permission to drive your car -- is called a permissive driver [source: Auto Insurance Remedy].

But let's say you're driving along, and a street sign jumps out in front of your car. There's a huge crack in your windshield, and the sign sure doesn't have insurance. Is it up to you to pay for the damages? Not if you have collision coverage. If you get into an accident and there's a question as to who's at fault, collision coverage will pay for your damages no matter what [source: Kiplinger]. And, of course, this comes in handy when an inanimate object is involved. Like comprehensive policies, collision insurance covers your car as long as a permissive driver is operating it [source: Auto Insurance Remedy].

On the next page, we'll look at the other piece of the auto insurance puzzle -- the types of insurance that cover the driver, not the car.

Auto Insurance that Follows the Person

While we're talking injuries: Sometimes injuries like whiplash take a couple days to present symptoms, so don't sign away any rights to medical coverage offered by an insurance company directly after an accident.
While we're talking injuries: Sometimes injuries like whiplash take a couple days to present symptoms, so don't sign away any rights to medical coverage offered by an insurance company directly after an accident.
George Doyle/Stockbyte/Thinkstock

Liability insurance is one type of coverage that follows the person, not the car. It will pay for damages to other people and other people's property that you're found at fault for causing. The three types of liability insurance are person (which is the total your coverage will pay for a single person injured in an accident), accident (which is the total coverage for all people injured) and property (which, yes, covers property damage).

So just how much coverage do you need? Well, that depends where you live. For example, Pennsylvania requires that all drivers carry a minimum of $15,000 in coverage for single-person injuries, $30,000 for total accident injuries, and $5,000 for property damage. However, this varies widely across states; for example, at $100,000, Alaska has the highest requirements for multiple-injury coverage [source: Auto Insurance Remedy; All Insurance Info].

Medical payments and bodily injury insurance are two other types of coverage that follow the person, not the car. Medical payments (med pay) coverage pays for any injuries that you or your passengers may incur in an accident, regardless of who's at fault. However, if you already have decent health insurance, med pay coverage may be redundant -- talk to your health insurance company if you're not sure. Med pay coverage is usually optional, but some states do require it [source: Auto Insurance Tips]. Check with your state's Department of Motor Vehicles or Department of Driver Services to find out what kinds of coverage are required and how much you need to be insured for.

This all means that even if you're driving someone else's car, you're still covered if you meet two requirements:

  • First, the owner of the car you're driving must have insurance. Since most insurance follows the car, not the driver, you're covered as long as you have permission to drive that car.
  • Second, you as a driver must have insurance. While things like comprehensive and collision insurance won't follow you to a car that's not yours, that's already taken care of by the driver's insurance. And the coverage that doesn't follow the car -- med pay, for instance -- follows you from your own policy, no matter what car you're driving.

Want to know more? Check out the links on the next page.

Author's Note

Let's be honest: Auto insurance isn't the sexiest article topic. But I did find the process of writing about it really useful, since if I'm driving a car, it's good to know how it's (and I'm) protected, right? I found that many agents I spoke to didn't know much about how auto insurance works outside of their state, but Web sites selling auto insurance actually ended up being good resources. That's not usually the case with Web sites that are trying to sell you something, but since their customers really do have to understand what they're buying before the pull out the credit card, I was in luck. It was also really interesting to learn how the requirements for coverage vary from state to state, and it's something I'll definitely pay attention to the next time I'm road tripping.

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  • All Insurance Info. "Medical Payments Coverage." (March 10, 2012)
  • Auto Insurance Remedy. "Collision Auto Insurance." (March 13, 2012)
  • Auto Insurance Remedy. "Pennsylvania Auto Insurance." (March 14, 2012)
  • Auto Insurance Remedy. "What Is Car Insurance?" (March 10, 2012)
  • Auto Insurance Tips. "Medical Payments Coverage vs. Health Insurance: Must I Carry Both?" Oct. 19, 2009. (March 10, 2012)
  • Consumer Reports. "Save On Car Insurance." (March 10, 2012)
  • Kiplinger. "Collision Coverage: Don't Take Chances." (March 10, 2012)
  • Kiplinger. "Comprehensive: A Grab Bag of Coverages." (March 18, 2012)