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Dec Page
- Insurance, Explained
What Is a Standard Auto Policy?
Your policy isn’t one big safety net — it’s a bundle of distinct coverages, each protecting you from a specific kind of financial headache.
A standard personal auto insurance policy is typically broken down into a few core components. Here’s what each one does, and when it applies.
Protecting Other People
Bodily Injury LiabilityBI
If you cause an accident that injures someone else — another driver, their passengers, or a pedestrian — this pays for their medical bills, lost wages, and pain and suffering. It also covers your legal defense if they sue you.
Property Damage LiabilityPD
The amount you pay out of pocket before your insurance company kicks in to pay for a claim. For example, if you have a $1,000 deductible and a storm causes $5,000 in roof damage, you pay the first $1,000 and the insurer pays the remaining $4,000.
How it looks on your policy - the three split numbers:
100 / 300 / 50
$100k
Max payout for medical bills per person
$300k
Max payout for medical bills per accident (everyone)
$50k
Max payout for property damage per accident
Protecting Your Vehicle
When a bank or dealership requires “full coverage” for a loan or lease, they mean these two. Both require you to pay your chosen deductible before the insurer pays the rest.
Collision Coverage
Pays to fix your car if you collide with something — regardless of who’s at fault. That includes hitting another car, backing into a tree, or rolling the vehicle.
Comprehensive Coverage
Think of this as “everything except a collision.” It pays to repair or replace your car when it’s damaged by something out of your control: theft, vandalism, a cracked windshield, hitting an animal, fire, hail, or flood.
Protecting You & Your Passengers
When a bank or dealership requires “full coverage” for a loan or lease, they mean these two. Both require you to pay your chosen deductible before the insurer pays the rest.
Medical Payments / Personal Injury Protection MedPay / PIP
If you cause an accident that injures someone else — another driver, their passengers, or a pedestrian — this pays for their medical bills, lost wages, and pain and suffering. It also covers your legal defense if they sue you.
Uninsured / Underinsured Motorist UM / UIM
If you cause an accident that injures someone else — another driver, their passengers, or a pedestrian — this pays for their medical bills, lost wages, and pain and suffering. It also covers your legal defense if they sue you.
How They Work Together
A quick side-by-side of what each coverage protects, and when it applies.
| Coverage | Who / What It Protects | Deductible? | Mandatory? |
|---|---|---|---|
| Liability (BI & PD) | The other party's body & property | No | Yes — almost everywhere |
| Collision | Your car (from accidents) | Yes | Only if financing / leasing |
| Comprehensive | Your car (from nature / theft) | Yes | Only if financing / leasing |
| MedPay / PIP | You & your passengers' injuries | Varies by state | Mandatory in some states |
| UM / UIM | You (if hit by an uninsured driver) | No* | Mandatory in some states |
*Some states apply a deductible for the property-damage portion of UM/UIM.
Still have questions about your policy?
We translate the fine print for you. Talk to a Madrona advisor and get a plain-English walkthrough of exactly what you’re covered for.