Car insurance is an agreement between you and an insurance provider to cover damages to your car and injuries to others involved in accidents you cause. Being knowledgeable of all available policies will allow you to select the one best suited to you.
Most states mandate liability insurance, yet it’s essential to consider additional types of protection as well. These may include:
Collision Coverage
Collision Coverage is an optional type of car insurance coverage designed to repair and restore vehicles damaged in accidents up to their actual cash value minus your chosen deductible amount. Insurers also typically offer rental reimbursement coverage which reimburses rental vehicle costs during repairs or replacement as part of a collision claim. While comprehensive and collision policies tend to differ when it comes to their deductible amounts, policyholders frequently choose one deductible amount so they know roughly what costs might arise when any physical damage claims arise on their car(s).
Your specific car insurance coverage requirements depend on factors like your driving history, car and location within your state. By becoming more familiar with the different types of coverages available to you and understanding them all in depth, it becomes easier to make educated decisions on which are suitable for both yourself and your budget. These coverages include collision, comprehensive and medical payments or uninsured motorist coverages.
Comprehensive Coverage
Comprehensive car insurance (often referred to as “other than collision”) is often an optional add-on that drivers can choose to add onto their policy. This form of auto coverage pays to repair or replace your vehicle after incidents unrelated to collision, such as theft, vandalism, natural disasters, windstorm damage or falling objects such as tree branches.
If you decide to purchase comprehensive coverage, one step will be selecting a deductible amount, which is what you will have to pay out-of-pocket prior to insurance kicking in. In general, higher deductibles lead to lower premiums.
Consider both the value of your vehicle and potential risks when selecting the deductible and coverage amount of comprehensive auto insurance. Speak with an independent agent who can guide your decision in order to find an optimal policy solution for you. Furthermore, ensure you comprehend any exclusions that may apply; these are situations which won’t be covered by your insurer.
Uninsured Motorist Coverage
Uninsured motorist coverage (also referred to as underinsured motorist coverage) protects you if an accident involves a driver who either doesn’t have enough insurance coverage or whose policy limits don’t meet your expenses. Although typically optional, certain states mandate it.
Medical payments coverage provides coverage for medical bills, lost wages, pain and suffering as a result of being involved in an accident with either an uninsured driver or one with minimum liability insurance policies. It may also cover damage to your vehicle if the at-fault party’s policies don’t cover this expense.
Uninsured motorist coverage comes in two varieties, uninsured bodily injury (UMBI) and property damage coverage (UMPD). While UMBI covers medical costs associated with an accident, while property damage (UMPD) provides repairs to your vehicle. Some insurance companies provide combined UM/UIM policies – ask your agent if such coverage exists in your state for peace of mind in case an uninsured or underinsured driver causes harm.
Medical Payments/Benefits or Personal Injury Protection (PIP)
Personal Injury Protection (PIP), otherwise known as medical payments coverage, is an integral component of car insurance that assists in covering injuries sustained in an accident regardless of who caused it. PIP policies are required by some states and can help cover expenses like medical bills, lost wages and funeral costs as well as services you might hire someone to perform on your behalf – house cleaning or grocery shopping, for instance.
PIP covers the costs of medical treatment related to injuries sustained in an accident, and you can typically add up to a limit of $250,000 of coverage per person. It may also overlap with health or disability policies.
Collision and comprehensive auto insurance policies provide extra protection when your car is involved in an accident, or stolen or damaged due to factors other than collision such as an animal attack, fallen tree or hailstorm damage. Drivers should consider purchasing more than the minimum liability coverage in order to safeguard their assets and savings.
Bodily Injury Liability
Bodily Injury Liability Insurance covers injuries sustained by third parties as a result of accidents caused by you or anyone driving your car with your permission, including medical bills, lost wages and legal fees if someone files suit against you. Most states mandate a minimum level of bodily Injury Liability Coverage while you can usually increase its limits to meet local requirements.
If you are injured in an accident, medical expenses coverage from this insurance can help pay for hospital visits, physical therapy sessions and funeral costs.
UM/UIM coverage is required in most states as one of two forms of auto insurance and serves to cover repairs if your car is hit by an uninsured or stolen driver. You may be able to increase this coverage limits; consider doing so if you possess significant assets to safeguard.
