Monday, September 15, 2008

Auto Insurance 101

What is auto insurance?

Auto insurance provides property damage coverage in the event that your vehicle is damaged, stolen, vandalized, as well as many other scenarios. Your liability coverage is extremely important in protecting others on the road and as well as all of the assets you have worked so very hard to earn. Bodily Injury, which is part of your liability coverage will cover medical expenses for the other driver in the event that an accident is your fault up to your policy limits. The core elements of an auto insurance policy remain the same regardless of company or policy. Many companies provide additional coverage and discounts that may differ from each other in order to stay competitive in this ever-changing market. Understanding how your policy protects you, your vehicle, and your assets is critical in the event of a claim.

How am I covered?
I have detailed and explained the core auto insurance coverage that is the same in every policy.

  • Liability Coverage – Provides coverage for the other driver in the event of an accident that our are deemed at fault.

  • Bodily Injury – Medical damage payable to others when an accident is your fault. It is usually stated in two parts.

Ie. 50/100 – This means that your policy in the event of a claim would reimburse the other party at $50K per person & 100K per accident regardless of the number of people in the other vehicle for their medical expenses due to the accident.

  • Property Damage – This would cover any damages you have caused to another person’s vehicle or property.

  • Uninsured/Underinsured Motorist – Uninsured Motorists would cover your medical expenses in the event the other driver at fault is not insured. Underinsured Motorist would add medical coverage to your existing medical amount in the event the other driver at fault does not have sufficient liability coverage to cover your medical expenses up to the limits of your policy. It is usually stated in two parts.

Ie. 50/100 – This means that your policy in the event of a claim would reimburse the other party at $50K per person & 100K per accident regardless of the number of people in the other vehicle for their medical expenses due to the accident.

  • Medical – This is the maximum amount of medical coverage your policy would pay out in the event of an accident whether or not you are at fault.

NOTE: It is important to understand that medical expense coverage on your auto insurance is not designed to replace a health insurance policy. It is designed to assist you with any out-of-pocket costs you may incur from your health insurance policy. Such as your out-of-pocket maximum deductible in your health insurance policy. This coverage usually comes in increments of $1K, $2K, 5K, 10K, etc.

  • Comprehensive – Provides coverage for damage to your vehicle when it is not being driven. Such as theft, vandalism, acts of god, etc. Your deductible would apply to damages from a comprehensive when there is no other person or policy to claim against. Such as a hit and run.
  • Collision – Provides coverage for damage to your vehicle in the event that you collide with another vehicle, property, etc. Your deductible would apply to damages from a collision accident if you are at Fault.
  • Towing – Provides towing service for your vehicle. In most cases you will need to pay up front and submit the receipt to your agent for reimbursement. May differ from company to company. Speak to your agent for details.
  • Rental Car Coverage – Provides you with a rental car while your vehicle is in the shop for any covered loss. Companies usually have different levels of coverage from which you may choose. May differ from company to company. Speak to your agent for details.

What additional coverage can I add?
These are just a few additional options that may or may not be available with your policy. It is always important to consult with your agent to find out all of your options so that you may make the most educated decision on which fit your needs best.

  • Glass Coverage
    In the event that you have a glass claim, your policy deductible would be reduced to a lower limit. Consult your agent for details.

  • Deductible Buyback
    For additional premium, in the event that you have an accident, your policy deductible would be reduced or waived. Consult your agent for details.

  • Accident Forgiveness
    In the event that you have accident, your policy premium would not be increased. Consult your agent for details.

  • Additional Equipment
    Additional coverage for rims, tires, stereo equipment, etc.

  • New Car Replacement
    In the event that your car is involved in an accident and is deemed a total loss, the insurance company would pay the necessary cost to replace your car with a new vehicle. Consult your agent for details.

  • Residual Debt Coverage
    Also known as “gap coverage” would pay the amount you owe on your vehicle to your bank, above what the insurance company determines the value of your vehicle.

Discounts:
These are a few discounts that your policy may offer. It is always recommended that you consult with your agents to see which of these may apply to your policy.

  • Multi-Policy Discount
    When insuring your autos and your home with the same insurance company. Adding more than one policy with the same insurance company

  • Multi-Car Discount
    When insuring more than one vehicle with the same company.

  • Good Credit Discount
    Apply to applicants with an above normal credit rating.


Payment Options:

Your Auto Insurance Policy has a few different payment options.

  • Annual
  • Semi-Annual
  • Monthly

Recommendations:
These are a few recommendations we have regarding your auto insurance.

  • Review your policy annually with your insurance agent.
  • Discuss the need for a Personal Umbrella Policy with your agent.

Get a free auto insurance quote today.

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DISCLOSURE: All entries by QuoteFishing.com are for informational purposes only and it is always recommended that you consult with your local insurance agent as coverage, definitions and claims procedures may differ from state to state.

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