2. Your car insurance can pay your own medical bills and income loss. Car insurance companies are required to offer customers the option of purchasing UM and UIM insurance. That is, Uninsured Motorist coverage and Underinsured motorist coverage. Here’s how this works.
Let’s assume you are rear-ended and seriously injured by a driver who is (illegally) driving without insurance. If this happens, your UM insurance kicks in, and your own insurance company will pay your medical bills and wage loss just as if it was the insurer for the at-fault driver. Similarly, if the driver who hit you has insurance limits that are too low to pay all your damages, your UIM insurance would kick in, and the higher amount of insurance you have would step in and pay those bills.
Keep in mind, though, that most insurance companies will only sell you UM and UIM insurance up the coverage limits of your liability policy. In other words, if you purchase a $25,000 liability policy, most insurance companies will not sell you a $50,000 UM or UIM policy to go with it.
Finally, be sure to purchase an adequate amount of PIP (personal injury protection) insurance. This part of your insurance policy will pay for the medical bills, up to a certain dollar amount, for any person riding in your car who is injured, regardless of whose fault the accident is. PIP insurance is valuable even if you already have a private health insurance plan because, unlike regular health insurance, there are no deductibles or co-pays with PIP insurance.