Understanding the Different Types of Auto Insurance

When driving in Maryland, you are required to have a minimum amount of auto insurance. This requirement helps ensure financing options for personal injury and property damage. Failure to meet the minimum insurance threshold could result in high fines and even loss of vehicle registration. But even if you do meet the base requirements, it’s often more beneficial to have additional coverage.

Common Types of Auto Insurance Coverage

You have many kinds of car insurance to choose from, and each one protects you in different situations. Having the right coverage is very important because it keeps you from facing big bills after an accident. It’s a good idea to talk with your MAIF insurance agent to choose the best plan for you and your car.

Liability Insurance

Liability insurance doesn’t pay you directly. Instead, it protects your money if you cause an accident. If you’re found to be at fault, you could be responsible for the other person’s medical bills or car repairs. Liability insurance helps pay for these costs so you don’t have to cover everything yourself. This is especially important for drivers who might have a higher chance of getting into an accident.

Collision Insurance

Collision insurance helps pay to fix your own car after a crash. This could be a crash with another car or even hitting something like a tree or a fence. If you’re leasing your car, you’re usually required to have this coverage. If you often drive in busy areas with lots of traffic, collision insurance can save you a lot of money on repairs.

Comprehensive Insurance

Comprehensive insurance covers damage to your car that wasn’t caused by a collision. This includes things like fire, vandalism, theft, hitting an animal, or damage from a storm. If you have a safe garage to park in every night, you might not need this as much. But if your car is often parked outside, comprehensive coverage can be a very helpful protection.

Personal Injury Protection (PIP)

Personal Injury Protection, or PIP, is very important for covering medical costs. It helps pay for injuries to you and your passengers, even if the accident was your fault. This type of coverage protects everyone in your car. If you often drive with family or friends, PIP keeps everyone safe from high medical bills after a crash.

Uninsured/Underinsured Motorist Coverage

This type of coverage protects you if you’re in an accident with a driver who has no insurance or not enough insurance to cover your costs. Even though insurance is required by law, many drivers on the road don’t have adequate coverage. If one of these drivers hits you, they might not be able to pay for your car repairs or medical bills.

Uninsured/Underinsured motorist coverage steps in to pay for these expenses so you aren’t left with the bill. This is a very important coverage to have for your own financial protection.

Medical Payments Coverage (MedPay)

Medical Payments Coverage, often called MedPay, helps pay for medical expenses for you and your passengers after an accident, no matter who was at fault. It can cover costs like hospital visits, surgery, X-rays, and even funeral costs. This coverage is similar to PIP but is often more limited in what it covers. It’s especially useful if you have a high-deductible health insurance plan, as it can help cover your out-of-pocket medical costs after a crash.

Gap Insurance

Gap insurance is important if you are leasing or financing a new car. If your car is totaled in an accident, your standard insurance will only pay you what the car is worth at that moment. It’s often much less than what you still owe on your loan.

Gap insurance covers that “gap” between the car’s current value and the amount you still need to pay on your lease or loan. This prevents you from having to make payments on a car that you can no longer drive.

Where to Get Insurance Coverage in Maryland

Knowing which kind of insurance coverage you need is only half the battle. Many insurance providers will deny coverage to high-risk drivers or might not offer the kind of coverage you want. At MAIF, we’re dedicated to helping every Maryland driver find the best insurance policy for their needs. Contact a local MAIF provider today to learn more about our policy options.