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Auto Insurance – Understanding the coverage you need

By May 22, 2020May 24th, 2021No Comments

Purchasing a vehicle, whether new or used, is a major purchase. It is important to have the proper insurance to protect your investment. Understanding insurance terminology will help when deciding what coverage you need and what additional coverage you may want.

Liability Coverage

Liability insurance protects you in an accident that you are found at-fault. It will provide property damage and medical payments to the third party involved.

Liability coverage does not provide coverage for repairs to your vehicle.

Most states have a minimum requirement for liability insurance. If your budget allows you should carry limits that exceed the state minimums. Damages that exceed your policy limits will become an out of pocket expense for you.

Comprehensive VS. Collision Coverage – What is the difference?

Comprehensive – Provides coverage for damage to your vehicle caused by covered perils such as theft, vandalism, hail and other non-collision related damages.

Collision – Covers damage to your vehicle in the event of a covered accident involving collision with another vehicle or object.

Comprehensive and Collision coverage are not part of a basic auto policy. This is additional coverage. If your vehicle has a loan this coverage may be required by the lender.

Uninsured/Underinsured Motorist Coverage

While all states have minimum liability coverage requirements there are still drivers on the road that are either uninsured or have inadequate coverage. In an accident with an uninsured/underinsured driver who is found at-fault you will either receive no payment or a payment that will not cover your damages. Drivers who have no insurance or carry bare minimum limits usually do not have assets to protect. It would be unlikely to be able to collect your damages from the at fault individual. Uninsured/underinsured coverage can protect you in this scenario.

Bodily Injury VS. Medical Payments – What is the difference? 

Bodily Injury – Provides coverage to the drivers and passengers of other vehicles involved in an accident that you are found to be at-fault. Your passengers are covered as well. Certain restrictions may apply if the passenger is a family member.

Medical Payments – This coverage is designed to cover the medical expenses for individuals in your vehicle if they sustain injuries in an accident. It would cover you and your family members as well as unrelated passengers. This coverage applies regardless of fault.

Personal Injury Protection -or- PIP

Depending on your state of residency, Personal Injury Protection may be required or an available option. PIP provides coverage for you  and your passengers if you are in an accident that causes injury. This coverage applies regardless of fault. Some of the items that PIP will cover are health insurance deductibles, expenses that exceed you health insurance limits, lost income, essential services and funeral expenses.

Other optional coverages are available such as  full glass coverage and car rental insurance to name a few.

Call us today to review your coverage. We can make sure you have the coverage you need.