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What Does Car Insurance Cover?

Do you have questions about how your car insurance coverage works? Auto insurance helps protect your finances after an accident, but what about rental car coverage or uninsured drivers? Do you know how you’re protected? If you find yourself wondering “what does my car insurance cover?” you’re not alone. It’s why we’ve put together this guide that’s all about car insurance and the way it works — for you.

The moments after an accident can be a stressful time to learn about how your insurance covers you. At American Family Insurance, we want to help you understand your coverage options, so you insure carefully before you need coverage.


Understand Your Car Insurance Policy, Once and For All

Let’s start with a quick look at the basic sections of an auto policy:

Coverage Definitions

Car Insurance Coverage Definitions

This section is the contract between you and the insurance company. It explains how you’ll be covered when the unexpected happens.

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How to read a policy illustration

How to Read an Auto Policy

We’ll explore who’s covered and look at how vehicles are listed in your policy. You’ll also review policy details like your coverage period and other factors.

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What car insurance covers

What Does Car Insurance Cover?

It helps protect your vehicle investment, but you’ll also need auto coverage to help pay for repairs, medical expenses and lawsuit damages after an accident.

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Car Insurance Coverage Definitions

What Does Liability Car Insurance Cover?

If you’re found at fault for an accident, liability coverage can help pay for damage you cause to others and their property. The ways that liability insurance coverage protects your finances may surprise you.

What Does Comprehensive Car Insurance Cover?

Comprehensive car insurance pays for damage caused by covered events and accidents that don’t involve colliding with another vehicle or object. A full three-quarters of insured drivers have this coverage and lenders require it when you take out a loan. Read about the details of comprehensive car insurance.

What Does Full Coverage Auto Insurance Cover?

Full coverage is a smart blend of collision, comprehensive and liability protection — under one policy. Take a look at some of the key reasons to consider full auto insurance coverage.

American Family Insurance Expert Tip

Understanding the meaning of full coverage before having an incident is very important. It is common for people to think they have full coverage when, in fact, they only have liability coverage. With a blend of collision, comprehensive and liability you’ll have better protection and peace of mind behind the wheel.

How to Read My Auto Policy

We design auto policies with our customers in mind. Instead of just handing you a thick policy full of industry jargon, you’ll get coverage details in your policy — broken down into plain language — so you’ll know how and when your coverage will apply.

1. Policy period


Consisting of a start and end date, you’ll find information on the active dates of your policy, in addition to grace periods and other date-related policy facts.

2. Vehicles Covered


All vehicles covered here will be listed along with the name of the car manufacturer, model, year built and vehicle identification number (VIN).

3. Premiums


This is the figure — or the amount you pay — for the term of your auto coverage.

4. Applied discounts


This section details active discounts that are in effect which lowered your premium cost. At American Family, we offer over a dozen ways to help you save on your coverage.

5. Drivers on the policy


This area will list the insured drivers that are covered under the auto policy operating the vehicles covered.

6. Coverage


This is where your policy defines your coverages and exactly how you’re covered — in dollar amounts — depending on the type of covered loss.

7. Limits


This region of your policy breaks down coverage in terms of upper payout limits by your insurance company. Typically, you’ll see something like 30/60/25 which translates into a $30,000 bodily injury max per person / $60,000 total bodily injury max per occurrence / $25,000 property damage max per occurrence.

8. Deductibles


This is the amount you pay out-of-pocket before your insurance company covers the costs of an accident or loss with an active auto policy.

What Does My Car Insurance Cover?

Your auto coverage helps to protect your finances, your car and the people in it in the event of a covered loss. Depending on the coverage you select, you can be better prepared for the unexpected.

Does My Car Insurance Cover Rental Cars?

In most cases, your auto coverage will cover you when you rent a car.

  • Check to make sure that you’ve got rental car liability coverage, personal accident and personal effects coverage. You should also verify that your policy has a collision loss damage waiver in place.
  • Some auto policies handle rental cars differently. So, be sure to call your agent and review your policy before you rent.
American Family Insurance Expert Tip

Purchasing insurance directly from the car rental location is not always necessary. Understanding what is covered in your policy before you rent a car can save you money.

Car going on empty dirt road

Does Car Insurance Cover Theft of Car & Car Parts?

If your car’s stolen, you can be covered with comprehensive car insurance coverage. Take a look at how comprehensive coverage protects you and your car’s expensive parts from theft.

Laptop in the front seat of a car

Does Car Insurance Cover Theft of Personal Items?

If your belongings are stolen out of your car and you’ve got a comprehensive auto policy in place, you’ll likely be covered. Learn all about how comprehensive coverage protects you in so many key ways.

A vandalized car

Does Car Insurance Cover Vandalism?

When vandals damage your car, you’ll have coverage to help pay for repairs when a comprehensive policy is in place. It’s important car insurance for claims that don’t involve another vehicle.

Car on the road as lightening strikes

Does Car Insurance Cover Storm Damage?

When foul weather hits, losses to your car can happen quickly. The good news: storm-related damage coverage is usually part of your comprehensive car insurance.

Two mechanics working on a car

Does Car Insurance Cover Repairs?

With optional collision insurance coverage, you can get help to pay the cost of repairing or replacing your car after being damaged in an accident, whether it’s your fault or not. Learn about the limits on when coverage applies.

Lady sitting and drinking coffee in the back of a parked car

Does Car Insurance Cover the Car or the Driver?

Your car insurance typically follows the car, not the driver. So, if you lend it to someone to use, and they’re in an accident, your coverage would be used when filing the claim. Take a look at the details on the way your coverage handles accidents when others are driving your car.

Couples standing by a parked convertible

Does My Car Insurance Cover Other Drivers?

In most cases, yes! Your car coverage usually extends to anyone driving your car. Learn about how at-fault accidents by authorized drivers operating your car are handled.

Broken down car on the side of the road

Does Auto Insurance Cover Medical Expenses?

With added medical payments coverage, you can find coverage for medical expenses. And usually, it’s coverage that applies regardless of who’s at fault. Take a look at the ways this key coverage can help safeguard your finances — and your health too.

Couple driving through the desert

Does My Car Insurance Cover Me in a Different State?

Your auto insurance is designed to work for you across the US and in select territories. Although coverage laws vary by state, most auto policies are active across the whole US and more. Explore how this coverage works today.

Lady taking in the view of the ocean

Does Car Insurance Cover Out of Country?

In most cases, your auto policy only applies to the US and Canada. Coverage for driving while overseas usually requires a special policy provided by your rental car company. You can also find other coverage with rental car insurance.

Tow ladies waiting for a tow truck

Does Car Insurance Cover Towing?

If your car is disabled because of a covered loss like an accident, towing will usually be included in your coverage. In case you break down, getting additional emergency roadside assistance can really save the day.

Man and a kid cleaning a new car

Does My Current Insurance Cover A New Car?

You’ll likely be covered with your current auto policy when you buy a new car — but for a short period of time. Learn about how your auto coverage’s grace period works and why it’s key to know those details.

Bringing It All Together

  • With the right coverage, you can find more peace of mind on the road — wherever it may lead.
  • After a covered loss car accident, medical expense coverage can help pay for costly hospital bills.
  • Comprehensive coverage helps protect your car from non-collision-related hazards and risks.
  • Additional auto insurance coverages can help you financially, when you need it most.
  • Emergency roadside assistance coverage is available to help you 24/7 — 365 days a year.
  • Consider additional coverages to prepare your auto policy for foul weather-related events.

Have More Questions About Car Insurance?

Getting your coverage right is always the most important part of buying auto insurance. If you still have questions, you can always reach out to your agent and find the peace of mind that you’ve been looking for.