Personal Auto Insurance
Personal auto insurance, although controlled by each state, is a package of coverages that provide liability coverage (3rd party) and physical damage coverage (1st party). Every state requires proof of liability coverage to register the vehicle in that state. Each state also sets the minimum limits of liability that are acceptable. More often than not, these minimum limits fall short of being practical, and the vehicle owner becomes at risk of paying out of pocket in the event of an at-fault accident.
The insurance agent who is concerned about your financial risk will most likely advise you to select higher limits than the state requires which in most cases, is not significantly more expensive than lower limits. Optional coverages should also be considered to increase the protection of the vehicle owner.
Bodily Injury Liability
Mandated by the state, this coverage pays for injuries to a third party in an at-fault accident. Typically, they are referred to on a per person and per accident basis, such as 100/300, meaning $100,000 per person and $300,000 per accident.
Property Damage Liability
Also mandated by the state, this coverage pays to repair or replace property in an at-fault accident. This coverage is also available to pay rental car charges.
Personal Injury Protection
This coverage is only available in states that have some form of "No-Fault” law. It is designed to pay for the insured’s injuries and lost wages in the event of an accident, no matter who is atfault.
Uninsured / Underinsured Motorist
This is considered an optional coverage that is designed to help pay for the insured’s injury expenses when you are hit by an uninsured or underinsured driver.
Medical Payments
Also considered an optional coverage, medical payments covers the insured and other passengers in the vehicle, up to the limit selected, no matter who is at fault. It is usually accessed to provide immediate payments for emergency room costs and ambulance charges. The limit selected applies on a per-person basis rather than a per accident basis.
Comprehensive Coverage
This coverage is required whenever a vehicle is financed or leased. It pays for damages to your vehicle not resulting from a car accident, such as theft, vandalism, hitting an animal or a cracked windshield.
Collision Coverage
Also required when a vehicle is financed or leased, Collision coverage pays for damage to the insured vehicle resulting from an at-fault accident subject to the deductible selected.
Other Optional Coverages
Roadside Assistance – reimburses the insured for roadside assistance costs.
Rental Reimbursement – reimburses the insured for rental costs following an at-fault accident.
Purchasing sufficient automobile insurance should not be taken lightly. It provides protection for your vehicle and most importantly, provides 3rd party liability coverage. Realizing that your coverage is insufficient shortly after an at-fault accident can be financially devastating. Contact us to speak with an experienced agent to get the advice you need to make an informed decision.