Car Insurance 101

All vehicle owners should have a basic understanding of automobile insurance.  If you don’t, you may not be getting the most appropriate coverage. In this article, we will discuss the many components of a typical automobile insurance policy so that you may become a better educated consumer.

  1. Property Damage Liability Coverage

    Property Damage Liability Coverage covers damage as a result of you or someone else driving your vehicle. Instead of covering medical and other damages to vehicle occupants, though, this covers damage to others’ property. While this kind of coverage is typically in reference to damage to another vehicle, it could apply to another person’s property.

    How much Property Damage Injury Insurance is it appropriate to have? Just like with the Bodily Injury Liability, a state will mandate the minimum coverage amount you need to carry and you may want a higher level. If you had only $20,000, for example, and you totaled another driver’s brand new car, that amount probably wouldn’t cover it.

  2. Collision Coverage

    Collision Coverage covers you for damage to your vehicle when it hits another vehicle or object. This policy is for you to get your car fixed up, or replaced if your car is totaled. Unlike liability insurance, the law does not require it, however, if you have a loan on your vehicle, or if it is leased, you may almost certainly have to have this coverage.What should you get for Collision Coverage? If you don’t have a loan on your car and you have an older model, you might want to look at covering it to the blue book value. If the value of the car is not high at all, you may want to consider running away from this coverage.


  3. Bodily Injury Liability Insurance Coverage

    Bodily Injury Liability Coverage pays for the medical damages and funeral costs for people injured or killed in an accident for which you (or a car you own, if you weren’t driving it) when the accident was your fault. Bodily Injury Liability coverage will cover passengers’ injuries in your vehicle if the accident is deemed to be your fault.

    How much Bodily Injury Insurance should you have? says your state will mandate a certain level of coverage you are required to have but it is important to realize that this is the minimum coverage; you may want more than the minimums. Here’s why: If hypothetically, you have coverage up to $20,000 and you have an accident and someone obtains a $50,000 judgement against you. In that case, the insurance would pay $20,000 and you would be responsible for the remainder.

  4. Uninsured Motorist Bodily Injury Coverage

    If a driver lacking insurance strikes your vehicle, this coverage pays for damages to you personally or other vehicle occupants. If the driver who struck your car has coverage, but it isn’t sufficient to pay for all damages, this insurance will also take over and cover the remainder. Common sense says it’s a good idea to have it. While in an ideal world there are no uninsured motorists, you need to be protected from the ones out there.

And there are other kinds

There are other types of coverage (towing, roadside assistance, and more) that you can get with your automobile insurance in addition to the above-mentioned groups. A local insurance agent can further advise you on available policies.

Article Courtesy: Milnes Ford

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