Car Insurance Basics
Most State laws require certain minimum coverages for all drivers. Car Insurance covers the cost of damages not only to other peoples property but also to their person. Because injuries are often an unfortunate part of car accidents, the State wants to insure responsible parties are able to cover the cost of these injuries. Car Insurance covers a lot of potential liability. We will cover the types of liability Insurance companies agree to insure you agains in the event of an accident.
Liability coverage is mandatory in almost all states. Drivers are legally required to purchase at least the state minimum amount of liability coverage. Liability coverage has two elements:
- Bodily injury liability will pay for damages related to another person’s injuries when you cause an accident.
- Property damage liability will help pay for damages you cause to another person’s property while driving.
UNINSURED AND UNDERINSURED MOTORIST COVERAGE
You should never skimp on the amount of uninsured motorist coverage. This type of coverage covers any damages to your vehicle or person if a driver who is at fault doesn’t have Insurance or doesn’t have enough coverage to pay all your damages. This type of coverage is required in some states and not in others. In either case, you will want to purchase this type of Insurance as it can pay your vehicle off in the event the at fault party isn’t insured.
COMPREHENSIVE COVERAGE (Full Coverage)
Comprehensive Insurance will cover damage to your car from things like theft, fire, hail or vandalism. If your car is damaged by a covered accident, comprehensive coverage will help pay to repair or replace your vehicle (up to the vehicle’s actual cash value). This type of coverage often has a deductable, which is the amount you’ll pay out of your own pocket before your insurer reimburses you for a claim.
This type of Insurance is often not required by State law, but if your car is financed your finance company will often require that you carry comprehensive coverage.
When you’re involved in an accident with another vehicle, or if you hit an object such as a tree or your teenage daughters boyfriend, collision coverage may help pay, repair or replace your car regardless of fault.
Most finance companies require collision coverage as a requirement of providing a loan.
MEDICAL PAYMENTS COVERAGE
When you’re in a serious car accident where you or your passengers are injured, medical payments coverage can help pay your medical bills. Covered costs may include the emergency room bill, hospital visits, surgery, X-rays and more.
Medical payments coverage is required in some states and optional in others.
PERSONAL INJURY PROTECTION
Personal injury protection, or PIP, is only available in some states. Like medical payments coverage, PIP may help pay your medical expenses in the event of an accident. Additionaly, PIP may also cover additional expenses incurred because of your injuries such as child care expenses or lost income.
Personal injury protection is required in some states and optional in other states where it’s available.