You need auto insurance for yourself and your employees if they drive company vehicles. Even if you and your drivers are capable and responsible on the road, you never know what distractions or lack of experience is behind the wheel of other vehicles. Understanding these car insurance coverage options will help you decide what coverage is best to protect you and your employees. Also, most states won't allow you to register an automobile without insurance.
Bodily injury liability
Bodily injury liability, or BIL, provides insurance coverage if you are responsible for an accident and the other driver/passengers have injuries. The coverage pays the other party's medical bills and pays for loss of income or pain and suffering. Typical coverage is $50,000 per person with a maximum of $100,000 per occurrence, but can be less or more depending on your preference.
Property damage liability
Property damage liability, or PDL, provides coverage if your vehicle causes damage to someone's property, whether it be their vehicle, home, landscaping or even a mailbox. Typical coverage is $50,000 per occurrence and can, of course, be more or less for your policy.
Comprehensive coverage insures your vehicle and other vehicles you may drive from loss resulting from incidents other than an accident, such as fire, flood, theft, animals or vandalism.
UM or UIM
UM stands for uninsured motorist, while UIM stands for underinsured motorist. These two coverages provide funds to you if the other party in an accident is at fault, but his policy can't cover your damages and injuries, he has no policy or the accident is a hit-and-run. This coverage also extends to the passengers in your vehicle.
Medical payments coverage
Medical payments coverage, also known as medpay or MEDPM, provides a flat payment amount to you and your passengers, regardless of who is at fault, for medical expenses. Personal injury protection coverage (PIP or MEDEX), which is only available in some states, is very similar to medpay but covers more, such as funeral expenses.
If you total your vehicle in an accident, your insurance will pay you what your vehicle is worth, but you still may owe money to a lender for your loan or lease on the vehicle. Gap coverage, also known as GAP insurance or loan/lease payoff, is an optional addition to your auto insurance coverage and helps to offset any amount you may still owe on the car after the insurance payout.