Auto insurance can make all of the difference in the world in the unfortunate event of an accident. Not only does it cover property damage, but auto insurance offers other protections as well.
For example, liability coverage will cover damage you cause to other vehicles in an accident, and it can also cover others’ medical expenses.
The type of policy you have will determine the dollar amount of coverage you receive in these areas. The cost of the policy will be affected by the level of protection you buy, and other factors such as your age, and driving record.
Given the importance of auto insurance, it’s a good idea to shop carefully when looking for appropriate coverage.
The policy itself is a contract that specifies your obligations, as well as the financial commitment of the insurer. The amount you pay for a set term of coverage is called the premium. Generally the premium of your auto insurance is fixed for the term of the policy barring unforeseen events, such as an accident.
State requirements for auto insurance vary from state to state and from individual to individual. Speaking to an insurance professional will help you make a decision based on your particular needs.
The premium for auto insurance is directly connected to 6 levels of coverage. These levels include comprehensive, collision, uninsured/underinsured motorist, property damage liability, bodily injury liability, and medical payments (also known as personal injury protection).
Comprehensive protection covers losses that are not a direct result of an accident. For example, comprehensive would come in handy if you sustained damage to your car due to a hailstorm.
Some drivers choose not to carry comprehensive, especially if they are driving an older vehicle of little monetary value. Also the deductible (the portion of an expense you pay out of pocket)may exceed the value of some older cars.
On the other hand, if you purchase a new car, especially with a loan, you may need to incorporate comprehensive in your policy.
Collision coverage appropriately covers your automobile in the event of a collision. This protection covers damage even if it’s determined you’re at fault in the accident. The cost of collision coverage will be affected by the deductible. Generally speaking, the higher your deductible the lower the premium for your auto insurance.
Uninsured and underinsured motorist coverage covers you in the event that you are in an accident caused by an uninsured or underinsured driver. This protects you as well as any other designated driver of your car. This coverage can be invaluable if you sustain significant injury. This type of coverage may also cover you if you are a pedestrian and a driver hits you.
Property damage liability covers damages you cause to another vehicle. It also covers damages you might cause to other property. If for example, you take out the neighbor’s fence going around a corner, property damage liability coverage will cover this.
Bodily injury liability coverage is particularly important. This helps protect you financially in the event that you cause an accident and cause injury to other people.
Medical payments coverage (personal injury protection) is a type of coverage that protects you and the occupants of your car for medical related expenses.
Auto insurance will help you and those you love if a mishap occurs. Finding the right auto insurance policy will help make your driving experience safer and more pleasurable.
For more information, see Make-Getting-Insurance-Easy.com/auto-insurance
By: David S
Posts Tagged ‘Liability Coverage’
Auto Insurance
November 16th, 2009Getting Temporary Or Short-Term Car Insurance Coverage
November 10th, 2009
If you are looking for short term car insurance you should know that you may not even need it. If you are thinking about getting car insurance for a short time period you are probably about to rent a car or borrow a vehicle…
Renting a car:
The rental car service will offer you some form of accident protection, liability insurance, loss damage waiver, and/or personal effects coverage. You do not need any of these offered insurances as long as you have your own car insurance because the insurance coverage you have on your car transfers over to the rental vehicle. It, however, does not transfer over if you are using the auto for some sort of business trip (something that is not recreational). In the following list you will find each of the 4 rental auto insurance possibilities and why you should probably skip each one…
Liability Insurance: All car insurance comes with liability coverage, which will transfer over to any car you drive. Keep in mind that liability coverage does not protect you, your passengers or you car, but those around the car (pedestrians, property, and other cars on the road).
Loss Damage Waiver: This protects the rental car from damage or loss. Some LDW’s only cover damage to the car if you are found to be innocent in an accident. Regardless, getting an LDW is pretty pointless if you have collision coverage (which would pay for repairs to the car regardless of who is at fault) and comprehensive coverage (which pays for damage or done to the car from things such as theft and collisions with wild life).
Personal Accident Coverage: It is very likely that you do not need this type of coverage because you either have health insurance, Medical Payments Coverage, or Personal Injury Protection.
Personal Effects Insurance: Your renters or homeowners policy will pay for the loss of items not only in your residence, but outside of it as well. If you want to insure something expensive, however, be sure to fill out a floater for that specific item.
If you are not absolutely sure if you are covered by your own car insurer, read your policy and, if you don’t understand something, give your auto insurer a call. You should also know that if you pay for the rental car using a credit card, the credit card company may provide short term coverage for that automobile.
Borrowing a car:
A lot of folks wonder if they need short term or temporary auto insurance if they borrow someone else’s car. Generally, no you don’t. The borrowed person’s car insurance coverage will transfer over to you as long as he or she gave you consent to use that car, making getting any type of short term car insurance useless. However, there are some things to keep in mind…
The liability insurance of the person from whom you borrow the car may not be enough to pay for liability damage that you cause while driving their car. If you have your own car insurance, this probably isn’t an issue. If, however, you don’t have your own car insurance and are held responsible for property damage of bodily injury liability fees after an accident, the liability insurance that is transferred over to you may not be enough. Say you cause $25,000 in damage and the lender’s liability coverage only goes up to $20,000. You are responsible for the additional $5,000, unless you have liability coverage yourself, which is at least $25,000.
You can easily correct the aforementioned problem by getting a non-owners auto insurance policy.
By: Nickolay Lamm
Understanding Auto Insurance Jargon
November 3rd, 2009
When reading through an auto insurance policy, it can seem almost impossible to understand. This is because there are various words that we do not use in our everyday language. Actually, those words are not really used outside of the insurance industry or outside of a conversation involving insurance. If you don’t have an understanding of those words, then it can seem as if someone is speaking a foreign language to you. That is why you should learn some of the insurance jargon that is thrown around because insurance happens to be a large part of your life.
Without insurance, you do not have any type of protection in case you are in a car accident. If you don’t have protection, then you can be sued. Being sued means you’ll have to pay for any damages sustained in an accident if the accident was your fault. Even if the accident wasn’t your fault, you still have to worry about your medical bills, replacing your car and the medical expenses of anyone in the car with you. This in itself makes it obvious why auto insurance is a necessity. Luckily, states mandate that people must have a minimum amount of auto insurance.
Basic terms
There are really only five basic terms that you need to know when talking about car insurance. Those terms are:
- Liability coverage
- Physical damage coverage
- Medical coverage
- Emergency assistance coverage
- Unattached equipment coverage
A few of these may look a bit familiar to you, but there are a couple of them may not. We frequently hear the terms liability coverage, physical damage coverage, and medical coverage when talking about car insurance and reading our policies. What we don’t hear much of is emergency assistance coverage and unattached equipment coverage. These are, of course, not as important as the other aspects of your coverage, but that does not mean that they should be ignored since they are great add-ons to your policy.
The most common of the terms you will hear is liability coverage. Liability coverage is the part of your policy that covers damages caused by you in the case of an accident. You should always make sure this coverage is enough to cover damages. If not, then you may have to pay an out of pocket expense to the person who was the victim in the crash. Medical coverage covers you and any passengers within your vehicle as a result of a crash. Physical damage coverage will help you repair or replace your vehicle.
As for the two terms that are a bit different, emergency assistance coverage is like a type of roadside assistance. Adding this to your plan provides you with tow service so that you’re not stranded on a highway in unfamiliar territory. Lastly, unattached equipment coverage provides coverage for that equipment that is not a permanent attachment to your car. That may include something such as a satellite radio system. If you have expensive attachments on your car, you want to make sure that you insure those as well so that you don’t have to pay for their replacement or can have those items repaired by your insurance.
Having an understanding
Knowing these terms is the first step in understanding some of the confusing but important terms that you will see and hear. If you don’t understand them, you cannot understand what type of home and car insurance coverage you have or even how it works. Knowing how it works helps you determine if what you have is adequate enough for your particular needs.
By: Amy Nutt