National Association of Insurance Commissioners outlines auto insurance coverage types and common gaps

The National Association of Insurance Commissioners published consumer guidance explaining the main forms of auto insurance coverage and what a standard policy may not cover. It describes full coverage as combining comprehensive and collision coverage, noting that lenders generally require it for financed vehicles. It also distinguishes liability coverage into bodily injury and property damage, which are required in most states, and notes that uninsured and underinsured motorist coverage is mandatory in some states. The guidance explains that comprehensive coverage applies to non-collision damage such as theft, hail, flood, fire and animal impact, while collision coverage applies to crashes, rollovers and damage from objects or potholes. Bodily injury liability covers injuries caused to others and can extend to listed family members driving another person’s car with permission, while property damage liability covers damage caused to another person’s vehicle or other property. The explainer also highlights several areas that may require separate protection, including guaranteed auto protection insurance when a vehicle’s value is below the loan balance, rental reimbursement, roadside or towing coverage, and medical payments or personal injury protection. It adds that standard auto policies do not cover specialty vehicles such as motorcycles, all-terrain vehicles, off-road vehicles, recreational vehicles or commercial vehicles.