Auto insurance is a necessity if you own a vehicle, so much so that the law requires it most everywhere. In some states, you are unable to get a driver’s license without a car and proper insurance. Insuring your car additionally protects you, your passengers, and other drivers from financial damage that can ensue after an automobile accident.
In the event that you, your vehicle, or someone else’s property have been harmed, coverage can give you the cushion you need to bounce back and pay back whatever you owe, without having to worry. Different types of coverage are also available to protect against theft, vandalism, fire damage, and other potential harm. Depending what you want out of your policy, your plan can pay for a broad array of services to keep your car, yourself, and others in tact.
Auto Parts: Components of a Car Insurance Policy
What does a minimal car insurance plan generally consist of? Although it varies by region, most car insurance policies cover a basic set of benefits, including bodily injury liability, property damage liability, collision, comprehensive, uninsured/underinsured motorists coverage, and Personal Injury Protection. In some areas, these are each divided into separate policies, though all drivers are required to have at least liability coverage.
Every state has a minimum liability insurance requirement establishing a dollar amount you must meet for injury to one person, injury to more than one person, or property damage, in order to drive. When you look at quotes for liability across various insurers or simply state laws, you will see this presented as a series of three numbers (for instance, 25/50/25).
The bare minimum policy for most drivers, liability insurance pays for the cost of any damage done to people or property while driving your car. Liability insurance does not, however, cover the cost of injuries to yourself or another person on your policy. As mentioned, liability is divided into three separate numbers, all of which must meet a minimum amount of coverage for three types of damage according to your state. Your liability plan covers a maximum amount for each of these, including bodily injury to one person (1st number), bodily injury to more than one person (2nd number), and property (3rd number).
In California, the minimum liability limits are $15,000 for injuring one person, $30,000 for multiple injured people, and $5,000 for property damage. Most insurance plans will exceed your state’s minimum amounts to comply.
Collision & Comprehensive Insurance
Collision coverage is another essential form of car insurance, as it pays for damage to your vehicle in the event that it gets hit or hits something else. As there are myriad other ways your car may get damaged, there is comprehensive insurance for the remainder of damage possibilities, such as fire, theft, vandalism, floods, and the like. It isn’t entirely necessary to buy collision and comprehensive, especially if you aren’t driving a more recently made vehicle. Old cars can usually be replaced for less than it costs to insure them, and the coverage won’t be too significant if the initial value is not very high. Newer cars can benefit much more from collision and comprehensive, as you will want to protect your new investment.
Personal Injury Protection (PIP) Insurance
Also referred to as “no-fault” insurance, sixteen states now require this form of coverage from all drivers. PIP pays for medical bills and lost wages if you are injured in an accident, and may also cover passengers and pedestrians. Additionally, personal injury protection covers funeral costs. Unless you live in one of these no-fault states, you can get away with not having PIP coverage if you are well insured under a health plan and have disability insurance. If you are a resident of a state where PIP is required, you can purchase a very basic plan if you also have good medical coverage.
PIP is required in Arkansas, Delaware, Florida, Hawaii, Kansas, Kentucky, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, Pennsylvania, Utah, and Puerto Rico.
Uninsured (UM)/Underinsured Motorist (UIM) Insurance
If you and your passengers get in an accident caused by a driver without coverage, your insurance will pay for the damages to you. It can also cover you if your car has been affected by a hit-and-run. UM is a requirement in even more states than PIP, including the District of Columbia, Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oregon, South Carolina, South Dakota, Vermont, Virginia, West Virginia and Wisconsin.
Underinsured motorists insurance helps you when a person causing an accident has insufficient coverage to pay all your medical expenses. Their insurance will pay what it can up to their limit, and your UIM insurance will kick in, paying the remainder of the costs until you have reached your maximum. UM/UIM are also of use for post-accident pain, and in certain cases, property damage.
Additional Coverage Options
Gap coverage and other forms of auto insurance are beneficial for individual circumstances. Towing and roadside assistance insurance can pay for expenses when you car breaks down, and rental reimbursement covers the cost of a rental vehicle when your car is stolen or harmed. Gap coverage for a new car covers the difference between the entire cash value of the car and the amount left on your loan if your vehicle gets totaled.
For more information on auto insurance types and details, as well as quotes for your region, visit East Coast Auto Insurance.