Auto insurance is essential if you own a vehicle. Auto insurance is required by law. However, this does not mean that you should not buy the minimum amount of insurance required by your state. Auto insurance covers more than just the liability costs. It is important to understand the different aspects of auto insurance coverage if you want to be fully protected from all costs arising from an auto accident. Continue reading to learn more about auto insurance and the benefits it offers.
There are many types of auto insurance coverage
The right amount of auto insurance can protect you against financial risks arising from an accident.
These are the basics of auto insurance coverage:
Bodily Injury Liability (BI):
This coverage covers the bodily injury you cause others as a result of an accident. BI covers you for the injuries, medical bills, pain and loss and wages. If the injured party decides to sue, this coverage will protect you from any lawsuits. This is the only way to get reimbursement from the at-fault driver in a tort state.
Property damage liability (PD).
This includes liability for damage to other property. PD will pay for any property damage you cause to another party’s property, whether it is their vehicle, house, or garden fence.
Medpay or Personal Injury Protection (PIP).
This coverage covers your medical expenses arising from an accident-related injury. PIP protects you, your passengers, and any other drivers who are permitted to drive for the loss. Depending on the policy, PIP covers medical expenses as well as lost wages, funeral expenses, and child-care costs.
You can receive reimbursement for all of the losses you suffered in “no fault” states even if the other person is to blame. You don’t need to wait for fault to be determined or waste time suing the other party for reimbursement for your loss. If your losses exceed the PIP limit, however, you can file a lawsuit.
Collision coverage:
This coverage covers the damage to your car that is caused by an accident. After you have paid the deductibles, your car will be covered in case of collision between vehicles.
Comprehensive coverage:
Your vehicle can be damaged by collisions with other vehicles. Comprehensive coverage can help you cover damage to your vehicle from other causes, such as fire, theft, vandalism and hailstorms.
Uninsured/Underinsured motorists coverage (UM/UIM):
If you are injured in an accident that is caused by an uninsured driver or a minimally insured driver, this coverage will pay for your losses. This coverage covers you in the event that you are struck and killed by a hit-and-run driver or a phantom car.
4. It is not wise to choose individual plans
Many people prefer to get group insurance through their employers. Individual health insurance plans can be quite costly. This is often false. In the past few years, there has been a steady increase in the cost of employer-sponsored group health insurance plans. Many employers have had to reduce their benefits because of the rapid rise in premium rates. Employers are also required to comply with all state laws regarding health insurance. This means that you will have to accept coverage that you do not need.
If you choose to purchase individual health plans, you can get the coverage you need. You can choose the coverage that best suits your needs. The coverage you don’t need in the future won’t cost you extra.
Many people believe that there is a limit to the number of uninsured individuals below 25 years. This is incorrect. Statisticians reveal that most people without insurance are aged between 30 and 50.