Insurance covers you and/or the cost of your vehicle in the event of an accident or theft. There are many options available. Below is a list of insurance types to help you make sense of all the options.
Liability insurance covers you in the event that you are at fault in an accident. It covers “Property Damage” as well as “Bodily Injury.” Most states require vehicle owners to carry some small amount of liability insurance.
Property damage pays for damage that you cause to the property of another person if you are at fault in an accident. This can include the cost to repair or replace their vehicle, as well as other personal property that may be damaged in an accident.
Bodily injury coverage pays for damage that you cause to another person if you are at fault in an accident. This can include hospital bills as well as pain and suffering. These costs can be extremely high, and if you are at fault in an accident, you may be financially responsible to pay for all medical expenses that exceed the amount of your coverage. Make sure you have plenty of coverage.
Collision and Comprehensive
Collision coverage pays to repair your vehicle in the event of an accident, regardless of who is at fault. If another driver is at fault and you have collision coverage, your insurance company will pay for the damage, then go after the other driver’s insurance to cover the cost. You may be responsible for part of the expense of the repair, however. This is called your “deductible.”
Comprehensive coverage also pays for damage that is not the result of an accident. That includes theft, vandalism, or natural disasters. If you have a valuable vehicle, it is a good idea to carry comprehensive insurance.
Surprisingly, many drivers out there are uninsured, and many more do not carry sufficient insurance to cover you in the event of a major accident where they were at fault. Uninsured/Underinsured coverage covers you in the event that an at-fault driver hits you. This can cover your vehicle (property damage) and any bodily injury you may sustain (medical expenses as well as pain and suffering). Like liability insurance, this is measured in terms of property damage and bodily injury coverage.
Uninsured coverage can cover you for the cost of medical expenses, as well as pain and suffering in the event of an accident with an uninsured driver. Carry as much Uninsured coverage as you can reasonably afford.
The phrase “full coverage” is often used. What does it mean, exactly? The answer is not a whole lot. You should be informed as to exactly what kinds of coverage you have, including the maximum dollar amounts of coverage and the deductible. Avoid the lazy short-cut phrase of “I want full coverage” when you’re reviewing your coverage with your insurance agent. Go through each of the options available.