#1 In a (5) Part Series, “Auto Insurance Basics”
Ok, so you want to get a grip on auto insurance, but you don't want to become an insurance agent? Good, we're going to explain all the basics to you in a very simple structure so you can have an intelligent conversation with your agent/broker.
Let's start with what exactly is auto insurance?
- Auto insurance coverage, is a legal arrangement in between you and the car insurance provider. The arrangement defines that if you pay the premium (expense of the insurance coverage), the insurance provider pays for losses (expenses related to the accident/incident) that are covered in your contract. For instance, if you have a mishap, something is taken, or vandalized, or your automobile is harmed by particular causes (noted in the contract). You will get money to repair the issue, based on the specific amounts for specific incidents defined in your policy (contract/agreement). The amount of money you get after making a claim (asking the insurer to make good on their end of the agreement/contract ) is based on may things, including your deductible and the limits you select or accept in your arrangement (insurance policy).
What Exactly Does Auto Insurance Cover? It's all about your risk as a driver/owner. Here is a quick introduction of these kinds of protections for the risks you face:
- Collision: If you struck another vehicle or something like a guardrail, your collision protection will payout for damages or repair works to your automobile after you pay a deductible (up-front quantity). To put it simply, if you have collision protection with a $250 deductible and you suffer damage that costs $2,500, your accident protection will pay $2,250 after you pay a $250 deductible amount specified in your contract (assuming you have a $250 deductible).
- Comprehensive: Comprehensive protection, which is sometimes called “besides accident,” takes care of losses to your car if it suffers damage from something other than from a collision. For instance, if a hailstone hits your car or truck or you struck a moose while driving, some part of that loss will be covered if you have this protection. Like collision, comprehensive has a deductible.
- Medical Expenses: This protection pays out for injuries that you, a relative or anybody else riding your car might suffer in a car accident, despite who is at fault. It likewise protects you for injuries you or your member of the family might sustain while riding in other vehicles.
- Uninsured/Under-insured Motorist: This protection protects you from injuries and home damage you suffer in an accident when the driver/operator at fault either is uninsured or does not have adequate insurance coverage to cover your injuries and damage. It will likewise cover you in case a hit-and-run driver runs away from the scene and you cannot litigate against that drivers insurance provider.
- Liability: Liability protection will pay for repairs, medical expenses and for injuries suffered by others in the vehicle, plus other costs connected to the accident such as legal charges (assuming you are considered at fault in a vehicle accident) . Your liability limitations are set at the time you acquire your policy. There are 2 parts to liability protection: Bodily injury liability and residential (or commercial) property damage liability. The limitations are the maximum amount the policy will pay; anything above that would come out of your own pocket unless you have other insurance coverage (gap coverage).
- Roadside Assistance: Many insurers provide this as an optional protection. If you require a tow or service for a tire failure or dead battery, roadside support will supply that service.
- Rental: If your cars or truck remains in the repare shop for a number of days and you require a rental vehicle, this protection will take care of that cost.