9 Insurance Coverages You Should Have Before an Auto Accident

by Jane Joseph | Last Updated: June 23, 2020

Auto insurance coverage can be complicated and understanding what type of coverage you should have before an accident takes place is important.

In order to help you protect yourself physically and financially after an accident, we have compiled a list of some of the most important insurance coverage options you should have to protect yourself before a car accident.

  1. Collision Coverage – Collision coverage pays to repair or replace your car in the event of an accident. Even if you are at fault and hit another vehicle or object, this type of insurance coverage should cover such damages.
  1. Liability Coverage – Liability coverage is essential, even though it doesn’t protect your vehicle. Just say you were at fault and hit another vehicle on the road. Well, liability coverage should pay for the auto-repair and medical costs that the other party may have incurred due to the accident. This can protect you from facing hundreds of thousands of dollars in liability costs.
  1. Medical Payments (Med Pay) – This type of coverage will pay for medical bills and treatments that are required due to injuries sustained in the accident. It will often cover yourself and your passengers, no matter who caused the accident.
  1. Personal Injury Protection (PIP) – If you are looking for medical payments but with more comprehensive coverage, then PIP may be the right option for you. In addition to covering medical expenses, personal injury protection may also cover lost wages, funeral costs, and substitute services.
  1. Guaranteed Auto Protection (GAP) – GAP insurance is important for individuals who are still paying off their vehicle. If you finance a new car and total it in an accident, the insurance company will usually only reimburse you for the vehicle’s actual market value, which is often not enough to pay off the loan. Therefore, GAP insurance should cover the remaining balance still owed on the vehicle loan.
  1. Uninsured Motorist (UM) and Underinsured Motorist (UIM) – While it is illegal to drive without insurance, some uninsured drivers are still on the road. This often times leads to hit and run accidents and leaves responsible drivers with injuries and damages, and nobody to cover the costs. An uninsured motorist package could cover these expenses.
  1. Rental Reimbursement – Rental reimbursement is generally not necessary if you have multiple vehicles, but it could come in handy if you have no other means of transportation. This type of coverage will provide a rental car in the event your car is being repaired in the shop after an accident.
  1. Forgiveness Coverage – While this type of coverage is completely optional, you may thank yourself later for opting-in. Forgiveness coverage essentially “forgives” your first at-fault accident claim, meaning your premiums will not go up, potentially saving you hundreds of dollars a year.
  1. Property Damage – Property damage liability coverage is required in most states. This option should cover any damages you caused if you were at fault in the accident. For example, if you crashed into a fence or another person’s vehicle, you should not be on the hook for these costly expenses.