Automobile Insurance
Auto insurance can be confusing. But once you understand the various types of coverage that make up your policy, it’s not confusing at all. Your auto insurance is really a package of seven primary coverage’s. Together, this coverage make up a standard auto policy. Each coverage has its own separate premium. Your premium payment is the total of these separate premiums.
- Bodily injury liability
- Medical payments, no-fault or personal injury protection coverage
- Uninsured motorists coverage
- Comprehensive physical damage coverage
- Collision coverage
- Property damage liability
- Rental reimbursement coverage
Provides protection if you injure or kill someone while driving your car. It also provides for a legal defense if another party in the accident files a lawsuit against you.
If you are in a serious accident, you want enough insurance to cover a judgment against you in a lawsuit, without jeopardizing your personal assets.
Bodily injury liability covers injury to people, not your vehicle. Therefore it’s a good idea to have the same level of coverage for all of your cars.
Typically covers medical expenses of the injured driver and passengers in your car. There may also be coverage if you are hurt by a vehicle as a pedestrian.
Pays for your injuries caused by an uninsured driver or, in some states, a hit-and-run driver, in a collision that is not your fault. In some states there is also uninsured motorist coverage for damage to your vehicle.
With the large number of uninsured motorists, this is very essential coverage to have, even in states with no-fault insurance.
Pays for losses resulting from incidents other than collision. For example, comprehensive insurance covers damage to your car if it is stolen; or damaged by flood, fire or animals. Select as high a deductible as you feel comfortable paying out of pocket to keep your premiums low.
Pays for damage to your car when your car hits, or is hit by, another vehicle or other object.
To keep your premiums low, select as large a deductible as you feel comfortable paying out of pocket. Since coverage is normally limited to the actual cash value of your car, for older cars, consider dropping this coverage.
Protects you if your car damages someone else’s property. It also allows for a legal defense if another party files a lawsuit against you. It is a good idea to purchase enough of this insurance to cover the amount of damage your car might do to another vehicle or object.
Pays for a rental vehicle (usually up to $30 a day) when the insured's vehicle is out of commission as a result of a loss covered under comprehensive or collision coverages. Higher limits are available.