Auto insurance provides financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise from them. Auto insurance may also offer financial protection against theft of the vehicle and damage to the vehicle, sustained from things other than traffic collisions.
Important notes to remember: Coverage follows the vehicle, not the insured. If the vehicle does not have insurance, it is not legal to drive it on the road and if an accident occurs, there is no coverage. Each coverage will have limits determined when the policy is set up. Please consult your agent to determine when limits are appropriate you.
Auto Insurance Coverage
There are basically six different types of coverage. Some may be required by law. Others are optional. They are:
- Bodily injury liability (required) - This coverage pays for bodily injury to others when you are at fault. Payment is generally not made unless there is a settlement with the insurance company.
- Medical payments or Personal Injury Protection (PIP) (required)- If you have bodily injury in, on or around your vehicle, you policy has coverage to cover bodily injury to yourself or others in, on or around your vehicle. For bodily injury, you will always go to this portion on your policy, regardless of fault. Commonly known as no fault insurance.
- Property damage liability (required) - This coverage pays for damage your vehicle causes to another's property; such as automobiles, buildings, etc.
- Collision (optional) - This is coverage to repair your vehicle in the event of a covered claim, such as an at fault accident, sliding off the road, etc.
- Comprehensive (optional) - This is coverage to repair your vehicle in the event of a claim that you have no control over such as hail, wind, hitting a deer, hit and run, etc.
- Uninsured motorists coverage (required) - This is coverage to pay for a bodily injury settlement to you or a passenger in your vehicle when you are a victim of an at fault accident and the at fault party does not have enough bodily injury insurance or does not have insurance at all.
- Rental Reimbursement (optional) - This coverage will pay for a rental car when your vehicle is in the body shop for a covered claim.
- Roadside Assistance (optional) - Also know as towing and labor coverage. This coverage typically pays for tow truck services such towing your vehicle to the nearest repair facility when it is inoperable, unlocking your vehicle when the keys are locked inside, fuel, starting the vehicle when the battery is dead, and extracting the vehicle when is stuck near the roadway.
Here is a video from the insurance information institute on the basics of car insurance.
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