Knowing Your Car Insurance Options
Auto insurance companies offer an abundance of coverage options for you to pick from. But which one is right for you? Learning more about the different types of auto insurance available can help you make an informed decision on an affordable yet comprehensive auto insurance policy that protects you, your family, and your car.
Standard Liability Insurance
In the event that you cause an accident that results in property damage or physical injury, standard liability insurance will compensate those not at fault. This could include the other driver, passengers, property owners, etc. It also covers court and defense costs, up to the limit of your policy. There are a variety of standard liability options; some of the most common are listed below.
Bodily Injury Liability -- If you are at fault in an accident that another driver or passengers are injured in, bodily insurance liability will cover the costs related to those injuries. Costs may include things like medical bills, pain and suffering, and loss of income. It can also provide a legal defense if the injured party decides to sue. Bodily injury insurance covers people, not property, and it only relates to other people who are involved in the accident (it does not cover you or other members on your policy).
Property Damage Liability --If you are at fault in an accident, property damage liability will cover you for any damage that you caused to another person's property. This is usually the other driver's car, but can also refer to a fence, house or any other property damaged in the accident. Property damage liability also provides you with a legal defense if the other party decides to sue.
Uninsured and Underinsured Motorist Insurance & Medical Coverage
Much like standard liability insurance, uninsured and underinsured motorist coverage offer both bodily injury and property damage options. This type of insurance comes into play when you are not at fault for an accident and the at-fault party either has no insurance or insufficient insurance to cover the damages to your person or property.
Uninsured motorist insurance will reimburse you for medical care and/or damage to your vehicle in the event you are not at fault in an accident. Some states have set limits on this type of coverage, and, as always, you will only be covered up to your policy's limit, so make sure you understand your family's needs and what your coverage options are before enrolling in uninsured motorist coverage.
No Fault Coverage
Medical Payments Coverage, First-Party Benefits or Personal Injury Protection (PIP), covers medical and funeral expenses for injuries sustained by persons riding in your vehicle, including you, whether or not you are at fault.
Depending on the state you live in, no fault coverage may be mandatory, optional, or unavailable. Click here to learn more about no fault insurance.
Collision & Comprehensive Coverage
Collision coverage takes effect when your car hits, or is hit by, another vehicle or object. It will pay to repair your car after you've paid a deductible. You select your deductible when you enroll in the plan. Set as a high a deductible as you are able to pay out-of-pocket in the event of a collision, as that will lower your monthly premium. Keep in mind that collision insurance maximums are typically set as the total value of the car. So, if damage to your car is greater than what it is worth, you will be reimbursed for the value of your car and not what it costs to fix it.
Comprehensive coverage insures your vehicle for incidents other than a collision. This includes damage to your car if it is stolen, as well as damage due to fire, flooding, animal-related damage, etc. Like collision coverage, comprehensive coverage requires a deductible, so make sure to select one that works for you.
Discount Auto Insurance
Getting a discount on your auto insurance might be easier than you think. There are a few simple changes you can implement that may make a big difference on your insurance bill. Things like reducing the mileage you drive, parking in a covered garage, getting auto and homeowners insurance from the same company, maintaining a good credit record, asking for a group discount, opting for a higher deductible, reducing the amount of coverage on your older cars, driving a reliable or lower profile car, receiving fewer violation tickets, taking advantage of good student rates and, of course, comparing all of your auto insurance options will help you get the best auto insurance rates available in your state.
