How Does An Auto Insurance Policy Work? 
Auto coverage will vary slightly depending on your state . However auto insurance is typically broken down into the following coverages : Liability Bodily Injury - Pays to cover the medical expenses of the damaged party -LRB- typically another driver and their passengers -RRB- if you cause an accident . This pays up to the limit listed on the policy . There is a limit per person and an aggregate limit per accident . Liability Physical Damage - Pays to cover damage to vehicles or other physical property -LRB- mailbox , guardrail , traffic signal , etc. -RRB- caused by the insured -LRB- you -RRB- . This pays up to the limit listed on the policy . Uninsured Motorist Liability & Uninsured Motorist Physical Damage - This coverage protects the insured against motorists without insurance or with insufficient limits to cover medical and physical damages to the insured . This pays up to the per person and aggregate limits listed on the policy . Collision - Pays the cost to repair/replace your vehicle if you hit something/someone minus the deductible listed on your policy . Note that if your vehicle is a total loss then you will be compensated based on the actual cash value of your vehicle which is the value of your vehicle considering depreciation . Other Than Collision -LRB- Comprehensive -RRB- - This coverage pays to repair/replace your vehicle for theft , vandalism , hail , damage by animals , etc minus the deductible on your policy . If your vehicle is a total loss it will be valued on an actual cash value basis . Personal Injury Protection - Pays for medical/disability expenses of the insured for an injury occurring in or around your vehicle up to the limit listed on the policy . Accidental Death & Dismemberment - Small life insurance component often added to auto policies that will pay a death benefit if you die or are permanently disabled in an auto accident . Towing/Roadside Assistance - Varies significantly by company and state Rental Coverage - Covers the cost of a rental vehicle for the time that your vehicle is in the shop due to a covered loss . There are multiple levels and this coverage may not cover the full cost of the rental . 