Understanding your Auto Insurance Coverage
Do you know what your auto insurance covers? No? Well, you’re not alone. Many people are unfamiliar with the various terms and coverage levels of their insurance plans. But it’s important for you to know this information. After all, you want to make sure that you have adequate insurance to cover any accident, don’t you? Read on for the most common types of auto insurance coverage.
Auto Insurance Coverages
The five most common auto insurance coverages are:
- Bodily injury liability
- Uninsured motorists coverage
- Comprehensive coverage
- Collision coverage
- Property damage liability
These may sound complicated, but they’re really easy to understand. Let’s take them one by one.
Bodily Injury Liability
This coverage pays for death or injuries to others that result from you driving your car. It also covers any lawsuits against you that may arise from the accident. Remember…lawsuits can be expensive if you lose, so make sure you purchase enough auto insurance coverage to pay for that possibility. The laws in most states require motorists to carry a minimum amount of liability insurance.
Uninsured Motorists Coverage
If you are ever in an accident caused by an uninsured driver, you will need this type of coverage. Depending upon the state, uninsured motorists coverage may also pay for hit-and-runs or damages to your vehicle caused by an uninsured motorist. Despite insurance laws, there are still a lot of uninsured motorists that could involve you in an accident. If you don’t have this type of coverage, you could be left holding the bag.
This type of insurance coverage pays for damage to your vehicle that is not caused by a collision. For instance, this policy will cover damages from storms, floods, animals, fire, etc. Although you may be tempted to skip this coverage, don’t. You never know when a freak hail storm or other event will create expensive damages to your automobile.
This type of insurance pays for damage to your car that was caused by a collision. It will also typically pay for damage to your car from any roadside incident (such as a pebble flying up and cracking your windshield.)
Property Damage Liability
This pays for any damage to others’ property that your car causes. It also covers any lawsuit that may be brought against you as a result of this damage. If you think that no one would sue you, think again. We live in an age where many people seem to look for reasons to file a lawsuit and hopefully make a fortune.
Although this list seems like a lot of complicated choices, and some seem to overlap, it’s not that difficult to decide which ones are best for you. The decision of what type of auto insurance coverage to purchase is an individual matter, based upon your circumstances and needs. Your insurance agent will discuss your options with you and help you decide on an affordable plan that also offers adequate protection.