When people look at their car insurance declarations page, it can look like a confusing list of numbers. To make sure you are properly protected, you need to understand the difference between the three main types of coverage: PIP, Bodily Injury, and Collision.

First, there is “PIP,” or Personal Injury Protection. This is mandatory in Florida. It covers your medical expenses up to a limit, usually $10,000, regardless of who was at fault in the accident. You submit your medical bills to the insurance company, and they pay them.

But the real concern, the one that keeps me up at night for my clients, is Bodily Injury (BI) coverage. This is liability insurance. If you are in a collision and it is your fault, the other driver isn’t just going to ask you to pay their doctor’s bill. They are going to sue you for “pain and suffering,” often for $50,000, $100,000, or more. Bodily Injury coverage pays for their injuries and, crucially, provides you with legal defense.

Finally, there is Collision coverage. This is simply to repair your car if you hit another vehicle or object. There is also “Comprehensive” coverage, which covers things that aren’t collisions, like if a tree falls on your car or a rock cracks your windshield.

Here is the tradeoff: Collision is not mandatory. If you are driving an old car worth $1,000, you might decide to drop collision coverage to save money. But you should never, ever drop your Bodily Injury liability. Even if your car is worth $500, if you hurt someone, they can still sue you for your personal assets. That is why understanding these line items is so vital.