Auto insurance can be confusing, but understanding the different types of coverage available can help you better protect yourself, your passengers, and your finances. Here's a breakdown of some of the most common types of auto insurance coverage and why they matter.
Liability Coverage
Liability coverage is required by law in most states, including Wisconsin. It helps pay for injuries and property damage that you cause to others if you are found legally responsible for an accident.
Liability coverage typically includes:
- Bodily Injury Liability – Covers medical expenses, lost wages, and other damages suffered by injured parties.
- Property Damage Liability – Covers damage to another person's vehicle or property.
- Supplementary Payments – May cover certain legal costs associated with a claim.
Liability coverage applies to you and anyone who is driving your covered vehicle with your permission, up to the limits listed in your policy.
Wisconsin requires minimum liability limits of 25/50/10, which means:
- Up to $25,000 for injuries to one person
- Up to $50,000 for all injured parties in a single accident
- Up to $10,000 for property damage
While these are the minimum requirements, many drivers choose higher limits for additional protection.
Uninsured and Underinsured Motorist Coverage
Not every driver on the road carries adequate insurance. If you are injured by a driver who has no insurance or not enough insurance to cover your damages, uninsured motorist (UM) and underinsured motorist (UIM) coverage can help.
This coverage may help pay for medical expenses and other losses resulting from the accident. Wisconsin requires a minimum of $25,000 in uninsured motorist bodily injury coverage.
Comprehensive Coverage
Comprehensive coverage helps pay for damage to your vehicle caused by events other than a collision. Common examples include:
- Hail and severe weather
- Falling tree branches
- Theft
- Vandalism
- Animal collisions
- Fire
Coverage is generally limited to the vehicle's actual cash value. Although comprehensive coverage is optional, lenders often require it if the vehicle is financed or leased.
Collision Coverage
Collision coverage helps pay for repairs to your vehicle after a collision, regardless of who caused the accident. This includes collisions with:
- Other vehicles
- Trees
- Guardrails
- Buildings
- Other objects
If your vehicle is financed or leased, collision coverage is usually required by the lender.
Most collision policies include a deductible, which is the amount you pay out of pocket before insurance coverage begins. Choosing a higher deductible can lower your monthly premium, while a lower deductible typically results in a higher premium.
Gap Coverage
New vehicles often depreciate faster than the loan balance decreases. If your vehicle is totaled or stolen, the insurance payout may be less than the amount you still owe on the loan.
Gap coverage helps cover the difference between the vehicle's actual cash value and the remaining loan or lease balance. This can prevent you from having to pay thousands of dollars out of pocket after a total loss.
Rental Reimbursement Coverage
Rental reimbursement coverage helps pay for a rental vehicle while your car is being repaired following a covered claim.
Policies typically include daily and total reimbursement limits, but this coverage can help you remain mobile and minimize disruptions to your daily routine while your vehicle is out of service.
Rideshare Coverage
If you drive for a rideshare service, such as Uber or Lyft, your personal auto insurance policy may not fully cover you while you are working.
While rideshare companies provide insurance coverage, there can be gaps in protection and high deductibles during certain periods of use. Rideshare coverage, sometimes called ride-hailing insurance, can help fill those gaps and provide additional protection when you're driving for a rideshare platform.
Protect Yourself Before an Accident Happens
Choosing the right auto insurance coverage can make a significant difference after an accident. Reviewing your policy regularly and understanding your coverage limits can help ensure you have the protection you need when it matters most.
If you have been injured in a car accident, the experienced attorneys at Hupy and Abraham are here to help. Contact us for a free consultation and learn more at Hupy.com.
