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Auto Insurance Rundown
Accidents, whether they’re minor or major, can happen to even the most cautious drivers.
No question about that—it is a fact. The question you should be asking is: do I have enough car insurance coverage?
Car insurance is a common part of life. In almost all states and countries, you are required to purchase car insurance before you buy or drive a vehicle. However, simply having the car insurance required by the law is not always the best choice. You can do so much better than settling for the minimum requirements.
Car Insurance: Exploring the Basics
When you purchase car insurance for your vehicle, you are entering into a contract with the insurance company that states that you, the policyholder, agree to pay the premium and the insurance company agrees to pay for any losses should an accident or theft occur.
The amount of your payment is based directly on the policy you purchase, and so it is necessary to be knowledgeable about the coverage and company you choose.
Basic Insurance Coverage
When you pay for a car insurance policy, you are required to purchase two types of liability coverage. This includes the state-required minimum, which for most states is the most basic type of auto insurance coverage available.
Bodily Injury Liability
As the term suggests, this refers to physical injuries or death caused by the policyholder as well as other drivers and passengers involved. Bodily Injury Liability will also cover the injuries caused by other drivers of the policy-holder’s car.
If you are a family member of the policyholder and your name is listed on the insurance policy, you will also be covered. You may benefit from this if you are driving another person’s car (with their permission).
Property Damage Liability
Accidents cause injuries and damage not only to people but also to properties. The second liability covered by mandatory policies is for property damaged in the event of an accident.
This will cover other cars involved as well as properties such as utility poles, speed barriers, houses, buildings, and other damaged assets.
Commonly Required Coverage
The following coverage is also customarily required if you own a vehicle.
Personal Injury Protection (PIP)
Also called Medical Payments Coverage, this will cover any medical fees for you and your passengers. It covers all individuals in the policy-holder’s car at the time of a collision.
It is used to cover fees for emergency bills, other medical fees, lost wages due to the accident, and other related expenses. This may also cover the replacement services fee for the work normally done by the person involved in the accident. In the event of a fatality, PIP can be stretched to cover the funeral expenditures of the person involved.
Coverage for Uninsured Motorists
Defensive driving classes give you a better chance of avoiding collisions. Time has shown us that it also serves as a financial safety measure. Sometimes, you may get involved in an accident involving uninsured drivers.
In these situations, you can be reimbursed by carrying coverage for motorists without insurance—if they are the ones at fault. Uninsured Motorist Coverage also covers victims of hit-and-run accidents. In cases where the driver is insured but does not have adequate coverage to pay for a serious accident’s cost, you will also benefit from having purchased Underinsured Motorist Coverage.
Additional Coverage for your Insurance Policy
Before you continue reading beyond this point, please quickly review the coverages we talked about above. Have you noticed that we have only discussed damages to another party’s vehicles and properties?
Now, you may ask about the fate of your vehicle and property. Great news! The following optional coverage will save the day for you.
When you are at fault, you are in a disadvantaged position. But purchasing this coverage will significantly ease the burden on your shoulders. Collision Coverage could reimburse the expenses that result from the damage to your car when you collide with another vehicle, property, or other objects such as speed barriers, guardrails, and utility posts.
Collision Coverage can also be used if your vehicle gets damaged as you drive through a pothole, or if your car flips over.
Coverage for Glass Damages
All vehicles have glass components. From the windshields in the front and rear to each of the passenger windows, large panes of glass surround your vehicle. Buying additional coverage for the car’s glass parts will decrease your cost liabilities in case they are damaged.
Coverage for Glass Damages may include damages to the windshield, rear windows, glass sunroof, panoramic and moonlight roofs, and side windows.
What if your side mirror is stolen or damaged? What if it gets side-swiped while your car is parked and unattended? What if it is struck by a missile?
Yes, you have read that last question right. Most Comprehensive Coverages include damage to your vehicle from almost all sources other than collision.
Comprehensive Coverage commonly covers damage caused by floods, fires, earthquakes, snow, hailstorms, animals, or falling objects. Human-caused damages are also covered such as theft, vandalism, and riots. Moreover, it can also reimburse the costs for the damage of otherworldly causes such as missiles and explosions. By otherworldly, we really mean out of this world, as Comprehensive Coverage can also pay off the damage caused by a falling asteroid.
Debunking Myths and Answering Frequently Asked Questions (FAQ’s)
Not being the one who caused the accident is generally a positive thing. But if the at-fault driver is uninsured, many problems will arise.
This is why it is important to have uninsured motorist coverage: so you will be covered even if the at-fault driver has no liability coverage. Underinsured motorist coverage, on the same note, will pay off the costs of other expenses that are not covered by the insurance policy of the at-fault driver. This can include important expenses such as emergency medical fees.
An old car can cost more to insure than a new car because older cars may not have some safety features that can decrease your premium. For example, an old car may lack curtain airbags. Or it may not have cruise control, speed-sensing door locks, lane departure warnings, and other important safety features.
Quick answer: not always!
In auto insurance, the principle “more for less” can apply. Insurance providers can offer coverage point breaks, meaning that lesser costs per dollar of coverage will be charged to you if you purchase more insurance products. To explain this point, imagine you are buying a product in a store. The less of an item you buy, the higher the price you pay for them. But if you purchase in bulk, the cost will be reduced. The same principle applies to insurance carriers.
The best value is found with 100/300 coverage. With 100/300 coverage, the coverage for the bodily injury per single person involved can be $100,000 maximum. The total cost for bodily injuries per accident can be up to $300,000.
The 100/300 coverage gives you adequate insurance without shelling out big bucks to pay your premium.
Importance of Purchasing Car Insurance
Considering all of the details explained above, getting the best auto insurance policy is the wisest thing to do. In addition to protection from huge financial strains if you are involved in an unfortunate accident, there are also additional benefits should you purchase one.
- It gives you peace of mind knowing you are insured no matter what happens on the road.
- You can protect yourself and the other people around you.
- Acquiring car insurance will help you avoid expensive damage costs.
- It will save you so much time as your insurance will take care of dealing with tedious settlement negotiations.
- Your insurance can provide you with additional benefits such as vehicle towing, replacements, and repairs.
Upgrade Your Current Policy Today!
Ready to acquire car insurance or to upgrade your current policy, call us at (941) 361-1532. We will help you find the right insurance as you traverse the roads.
We wish you safe travels ahead!