Car insurance is a puzzling but important aspect of car ownership. However, you must ensure that you are not wasting money by being overinsured or that you are not leaving yourself vulnerable to compensation or a loss of income by being underinsured.
We will discuss about the importance of bodily injury liability coverage and the types of auto insurance.
Bodily Injury Liability
Every area mandates bodily injury liability insurance. It safeguards your assets in the event that you cause an accident that results in the injury or death of another individual.
Although this sort of insurance is needed by law in every jurisdiction, the legal minimum coverage may not be adequate if you cause significant bodily harm or death to another person in an accident. In certain areas, bodily injury liability insurance is only required to cover a minimum amount per accident. Even modest medical expenditures that you could be sued for by another driver could surpass the limit.
Property Damage Liability
This is the type of insurance that protects you if you cause an accident and cause significant damage to another person's car or property. If you hit someone and their car requires body work, their insurance company will seek reimbursement from your policy (if you caused the accident).
Many cities require that drivers carry this coverage, but again, the minimum limits may not be enough.
Medical Payments
If you cause an accident, this insurance covers the expense of any medical care you or your passengers may require. It does not cover any financial losses such as lost wages that occur as a consequence of an accident that you cause.
Uninsured and Underinsured Driver Coverage
Uninsured and underinsured driver coverage protects you if you are hit by a driver who is either uninsured or underinsured. Uninsured/underinsured motorist coverage typically only covers physical injury costs, but in a few jurisdictions, it also covers property damage losses.
Physical Damage Coverage
There are two types of physical damage auto insurance: Collision and comprehensive insurance.
Collision insurance covers any damage to your vehicle only when you’re involved in an accident (including, for example, if you back into a tree).
Comprehensive insurance, on the other hand, covers all kinds of damage to your vehicle (including weather damage, windshield damage, theft, fire, or vandalism).
Physical damage coverage is only required if you lease or loan your vehicle, in which case your auto lender will need it to protect their asset until it is paid off. Having comprehensive coverage is a good idea throughout the first few years of a vehicle's existence, while it is still a valued asset with a high market value.
If your car is older, however, consider canceling comprehensive coverage. The less valuable your car on the resale market, the less you get from insurance should you get in an accident.
If you drive a very old automobile and it receives even slight damage in an accident, the insurance company may decide that the cost of fixing the car is more than its market value and instead pay you the resale value (maybe $1,500). Comprehensive coverage would only pay you $1,000 if you had a $500 deductible (the amount you agree to pay out-of-pocket in any insurance claim).
Speak with us to ensure a comprehensive coverage.
