Auto insurance covers damage to vehicles and property in crashes plus injuries to the people involved in the crashes. Different insurance coverages pay for vehicle damage versus injuries. Different insurance coverages also may apply depending on who is at fault — first-party insurance pays for your own losses, while third-party pays for losses to other people and property for which you are liable.
Vehicle and other property damage
If you are at fault in a crash, your own first-party collision insurance covers the damage to your vehicle and other property. If you are liable for damage to someone else's vehicle or property, your insurance pays for it under third-party property damage liability coverage. Theft and other noncrash losses are paid under comprehensive coverage.
- Collision coverage insures against physical damage to your vehicle in a crash if you are at fault. The damage may occur from striking another vehicle or an object.
- Property damage liability coverage insures against physical damage that at-fault drivers cause to other people's vehicles and property in crashes.
- Comprehensive coverage insures against theft or physical damage to insured people's own vehicles that occurs for reasons other than crashes.
Injuries to occupants and other people
Insurance coverage for crash injuries depends on the insurance system in the state in which the insurance is purchased. In states with no-fault insurance systems, crash injury costs are paid under the injured person’s first-party personal injury protection coverage (regardless of who is at fault), up to specified limits that may be monetary or based on injury severity. Costs exceeding the limits may be paid under an at-fault driver's bodily injury liability coverage. In states with traditional tort insurance systems, who pays for crash-related injuries depends on who is at fault. If you are at fault, your medical payment insurance covers your injuries, while bodily injury liability pays for injuries to other people. If you aren’t at fault, the at-fault driver's bodily injury insurance covers you.
No-fault insurance is sold in Delaware, Florida, Hawaii, Kansas, Kentucky, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, Texas, Utah and Washington. All other jurisdictions except Pennsylvania and D.C. have traditional tort systems. Pennsylvania and DC have hybrid insurance systems.
- Personal injury protection coverage, sold in states with no-fault insurance systems, pays up to a specified amount for injuries, regardless of who is at fault in a collision. The amount, which may be monetary or based on injury severity, varies from state to state and must be exceeded before an injured person may sue an at-fault driver for the additional costs.
- Medical payment coverage, sold in states with traditional tort insurance systems, covers injuries to insured drivers and the passengers in their vehicles but not injuries to people in other vehicles involved in the crash.
- Bodily injury liability coverage insures against injuries that at-fault drivers inflict on people in other vehicles.
Auto insurance loss facts
HLDI analysis of losses under the six insurance coverages defined above
Property damage liability coverage
Personal injury protection coverage
Medical payment coverage
Personal injury protection vs. medical payment coverage
Bodily injury liability coverage
Comparison of insurance losses under multiple coverages