Is Your Vehicle Insured the Right Way? An Auto Insurance Rundown
Accidents, both major and minor, can happen even to the most cautious drivers.
There is no question about it—that’s a fact. The question you should be asking instead is whether your automobile is insured appropriately.
In almost every state, country, and territory, authorities require you to purchase an insurance policy before you can buy or drive a motor vehicle. But only having the minimum amount of auto insurance required by the law is not always the best choice. You can do so much better by not settling for the minimum requirement. In this article, we will dig deeper on how you can insure your car the best way possible.
Auto Insurance 101: Exploring the Basics
When you acquire auto insurance for your vehicle, you are making a contract with the insurance company that states that you, the policyholder, agree to pay the premium. As the other party, the insurance company agrees to pay any losses should a covered accident or theft occur.
This payment will be based directly on the policy you purchase, which is why it is so important that you are knowledgeable about the coverage and company you choose.
Basic Insurance Coverage
Your auto insurance policy will almost always be required to include two types of liability coverage. This is the state-required minimum in most states, and is the most basic type of auto insurance coverage available.
- Bodily Injury Liability
As the term may suggest, this refers to physical injuries or death caused by the policyholder, which applies to the other driver and any passengers involved. This will also cover the injuries caused by other drivers while at the helm of the policyholder’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. Additionally, you may benefit from this if you are driving another person’s car (with their permission).
- Property Damage Liability
Accidents may cause injuries and damages not only to people but also to properties. The second liability covered by the mandatory policy is for property damaged in a collision.
This will cover other vehicles involved as well as properties such as utility poles, speed barriers, houses, buildings, and other damaged assets.
Commonly Required Coverage
Aside from the mandatory coverage, the following coverages are also normally required if you own a vehicle.
- Personal Injury Protection (PIP)
Also called Medical Payments coverage, this will cover any medical fees incurred by you or your passengers. This applies to all the individuals in the policyholder’s car at the time of the accident.
This will be used to cover fees for emergency billings, 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. Sometimes, this may be stretched to cover the funeral expenditures of the person involved.
- Coverage for Uninsured Motorists
Defensive driving is taught so you have a better chance of avoiding accidents, so it is generally used for your own physical safety. But 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 through coverage for motorists without insurance, provided that they’re the ones who caused the accident. This will also cover the victims of a hit-and-run. In cases where the driver is insured but did not have adequate coverage to pay for serious accident costs, you may purchase underinsured motorists 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 they only cover the costs of damage to the other party’s vehicles and properties?
At this juncture, you may ask about the fate of your own vehicle and property. Great news! The following optional coverages will save the day for you.
- Collision Coverage
When you are found at fault, you will generally be put at a disadvantage. However, purchasing this coverage will significantly ease some of the burden from your shoulders. With this, you can be reimbursed for the expenses that result from damages to your car after you have collided with another vehicle or to properties and objects you hit. It covers objects near the road such as speed barriers, guardrails, and utility posts.
This can also be used if your vehicle was damaged by a pothole, or if your car flipped over.
- Coverage for Glass Damages
All vehicles have glass components and parts. From the windshields in the front and rear to the passenger windows, large panes of glass surround your vehicle. Buying additional coverage for these glass parts will reduce your cost liabilities on the occasion that they are damaged.
This may include damages to the windshield, rear windows, glass sunroof, side windows, and panoramic and moonlight roofs. The costs of damages to these parts may be reimbursed if you purchase additional glass coverage.
- Comprehensive Coverage
What happens if your side mirror is stolen or damaged? Or maybe if a missile hits it while you are parked? Yes, you read that second question correctly. Most comprehensive coverages include damage to your vehicle from almost all sources other than collision.
This commonly covers damages caused by flood, fire, earthquakes, snow, hailstorm, 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 seemingly otherworldly causes such as missiles and explosions. And by otherworldly, we really mean out of this world, as comprehensive coverage can also pay for the damages caused by a falling asteroid.
Debunking Myths and Answering Frequently Asked Questions (FAQ’s)
- Why do you need uninsured motorist coverage if you are in a no-fault state?
A no-fault state means that you are not the one who caused the accident. Generally, this is a positive situation. But if the at-fault driver is uninsured, many problems will arise.
This is why it is important to have uninsured motorist coverage: so that 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 and other medical expenses.
- Why does my old car cost more to insure than a new car?
Surprisingly, an old car can cost more to insure than a new car. This is because there are some missing features on your old car that can increase your overall premium. For example, an old car may not have side curtain airbags. Or it may not have cruise control, speed-sensing door locks, lane departure warnings, and other important safety features. These are liabilities that increase the cost for your Personal Injury Protection over that for newer cars.
- Is state-minimum insurance always cheaper?
Quick answer: not always.
In auto insurance, the principle “more for less” can apply as insurance providers sometimes offer coverage point breaks. With this, lower 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 the product. But if you purchase in bulk, the cost will go down. The same principle goes for insurance carriers.
- Why is 100/300 coverage so common?
This insurance policy gives the best value for money. With 100/300 coverage, the coverage for bodily injury per single person involved can be set at $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 your having to shell out big bucks to pay your premium.
Importance of Purchasing Auto Insurance
With all the details explained above, it should be clear that getting the best auto insurance policy is the wisest thing to do. In addition to being protected from huge financial strains if you get involved in an unfortunate accident, there are additional benefits to purchasing a great policy.
- It can give you peace of mind to know that you are insured no matter what happens on the road.
- You will most definitely protect yourself and the others around you.
- Acquiring auto insurance will help you avoid expensive out-of-pocket damage costs.
- It can save you so much time as you avoid settling on many tedious negotiations.
- You can enjoy additional benefits such as vehicle towing, replacement, and repairs from insurance carriers.
If this article convinced you to acquire auto insurance or to upgrade your current policy, feel free to reach us through our contact page or call us. We will be more than happy to help you be insured and safe as you traverse the Florida roads.
We wish you safe roads ahead!