Although auto insurance is a legal requirement, how many people know the details of what coverages they have and what they cover? It is best to learn before you buy insurance. Nobody likes surprises!
Bodily Injury covers injuries to the victim(s) and wages lost as a result of the accident. They usually show it as per person or per occurrence. The per person amount is what they will pay for one person, while the per occurrence is how much they will pay for each accident. If you hit a car with two people, and your coverages are $100,000/$300,000., those 2 people could receive a maximum $200,000 for their injuries.
Property damage coverage covers property damaged by you, even if the accident was your fault. This coverage covers damage to property caused by an accident. The company will pay $10,000 if you insure $10,000 for Property Damage and then you accidentally damage Denali. With that much coverage, you will probably barely use it. It would also cover fences and mailboxes as well as grass and any other property.
Medical Payments* coverage is optional in some states and if you have it, it covers each person in your auto up to the maximum coverage. Imagine that you have 2 passengers in your vehicle and you have an accident. If your maximum medical payments are $5000 per individual, then all three passengers would be entitled to $5000 in medical bills for the accident.
Uninsured motorist coverage is an optional coverage, and they charge additional premiums for it. This coverage covers you in the case that you are involved in an accident with someone else who doesn’t have insurance. You might be in this situation: you were hit in the back and were taken to the hospital with a $20,000. The at-fault driver is not insured. The $20,000 cost of the bill would be covered by your insurance.
Motorists who aren’t insured
The coverage works in the same manner as Uninsured motorist. This coverage is only available if you are struck by an insured person who doesn’t have enough insurance. You were rearended, and you ended up in the hospital. Your hospital bill is $20,000, and the at-fault driver is responsible for $15,000 per person. Your policy would cover $5,000, while his policy would cover $15,000
Comprehensive coverage is an optional option. It covers damage to your vehicle due to fire, theft wind hail flood, hail and other causes. You will need to pay a deductible if you are liable for a loss. You might be struck by a large branch or windblown tree. An estimate is given for $2,000 repair. You have chosen a $500 deductible. You pay $500 for repairs and your policy pays $1,500.
Collision coverage can be purchased separately and covers damages to your vehicle due to collisions or upset. You will need to pay a deductible if you are a victim of an accident. If, for example, your car was in a parking lot when someone struck your vehicle and fled. You have a $500 deductible and the damage was $2,000 The $500 is paid to the body shop, and the $1,500 is paid by your insurance company. NOTE: Any damage caused by an accident in your parking lot would be covered by the policy’s property damage coverage.
Towing and Rental coverages are often elective. Rent coverage is per-day based with a maximum that is 30 times the daily amount. This will pay your per-day rental car amount while your car’s in the shop for repairs. If your car is damaged by a branch, it can be brought to the shop for repair. While your vehicle is being repaired, you may rent a car. This coverage is covered by your policy at $40 per day. Your policy will cover the $120 rental fee if you rent the vehicle for three days. Towing coverage may have a limit. Your policy will reimburse you for any towing costs incurred for your car, if it was not for an accident. Towing coverage would not cover a tow if the tow was necessary because of a collision.
Additional coverages are available
If you have any specific needs, speak with your agent.
Final …………
These descriptions do not address all possible situations. Talk to your agent about any particular issues. I simply wanted to clarify the coverages so you are aware of what your policy covers. It is amazing how many people I’ve spoken to didn’t know what coverages were available or what they wanted.
*Medical payments coverage is not offered in all states, some offer PIP
