A question you might ask yourself is: why must we carry auto insurance? Hopefully one answer you should hear is to protect yourself and your car. For those same reasons the government also requires you to have car insurance.
Each state requires you to carry at least the minimum requirements. Every state has different limit, coverages and deductible requirements. Our site explains every requirement and handles it all when you are quoting and purchasing through our site.
There are many different types of auto insurance coverage to choose from, depending on what you want covered and what you can afford. Where should you get started?
First you should ask yourself if you have enough coverage in case of an incident occurring. In most states the basic insurance requirements include Property Damage Liability and Bodily Injury Liability. There are limits associated with each Liability coverage and it is always recommended by the insurance industry that you protect yourself to the fullest by getting the highest limits that you can afford. State limits may allow you to register your car per state laws but if you are cause a serious accident, especially if there is more than one car involved that you hit, minimum limits can easily be exceeded which leaves you and your assets at risk.
Liability coverages cover others that you cause damage. They do not normally cover you, your passengers or your car in any way. Property Damage Liability (PD or PDL) covers you if your car damages someone else's property. Usually it is their car, but it could be a fence, a house or any other property damaged in an accident. It is a good idea to purchase enough of this insurance to cover the amount of damage your car might do to another vehicle or object. So if you hit someone’s car or a person’s fence or even the state’s guardrail in an accident your Property Damage Liability coverages will cover you, up to your limit amount.
Bodily Injury Liability (BI or BIL) coverage is required in most states but some, such as the no-fault state of Florida, do not require it. Whether it is required by law or not it is wise to have this coverage and again with the highest limits you can afford. Bodily Injury Liability covers other people's bodily injuries or death for which you are responsible. Claims for bodily injury may be for such things as medical bills, loss of income or pain and suffering.
In the event of a serious accident, you want enough insurance to cover a judgment against you in a lawsuit, without jeopardizing your personal assets. Bodily Injury Liability covers injury to people, not your vehicle. Therefore, it is a good idea (and usually an insurance company requirement) to have the same level of coverage for all of your cars. Bodily Injury Liability does NOT cover you or other people on your policy.
As we mentioned there are exceptions to all state requiring BI coverage. For instance in Florida you do not have to maintain this coverage per state laws, unless you get into an accident with injuries. Then if you did have it, BI would give coverage if you were at fault in an accident and the person in the other vehicle suffered injuries exceeding their Personal Injury Protection coverage. If you did not have this coverage the other party has the right to sue and the state may place a financial responsibility on your motor vehicle report, which you would have to carry for 3 years. That financial responsibility is called an SR22. So even in a state such as FL where this coverage is not required it is much better to have it in case of causing an accident with injuries than to not and leave you and your assets at risk plus being required to file a SR-22.
Uninsured Motorist Bodily Injury (UM or UMBI) is another coverage you may want to consider. Uninsured motorist covers you if the other party was at fault and you were injured and they were not insured. UM covers you, the insured members of your household and your passengers for bodily/personal injuries, damages, or death caused by an at-fault uninsured or hit-and-run driver. If you are involved in an accident where the other driver is at fault but has no insurance, your policy will cover your medical expenses, up to the limit on your policy.
There is also Underinsured Motorist Bodily Injury (UNDUM) which covers you, the insured members of your household and your passengers for injuries, damages or death caused by the negligence of a person with insufficient insurance. If you have an accident with a person whose coverage cannot meet your damages, your policy will meet the difference-up to the limit of liability listed on your policy.
In some states UM, and sometimes UNDUM as well, are required as part of the basic minimum insurance requirements while in quite a few other states the coverage is not required however the auto insurance provider must offer you the coverages and you must decline in writing if you do not want them as part of your policy.
There are also Uninsured and Underinsured Motorist Property Damage coverages though they are not available in every state. Uninsured Motorist Property Damage (UMPD) covers your auto when property damage is sustained by an insured and the negligent operator does not possess insurance. If you do not have Collision coverage, Uninsured Motorist Property Damage coverage pays up to a certain amount for repairs to the insured car (some states have limits at $3500, some are lower and some are higher). If you have Collision coverage, Uninsured Motorist Property Damage coverage only pays your Collision deductible (in some states).
Underinsured Motorist Property Damage covers when property damage is sustained by an insured and the negligent operator possesses insurance, but the limits of liability carried by the negligent driver are not sufficient to cover the damages. Similar to UMPD if you do not have Collision coverage, Underinsured Motorist Property Damage coverage pays up to a certain amount for repairs to the insured car (some states have limits at $3500, some are lower and some are higher) If you have Collision coverage, Underinsured Motorist Property Damage coverage only pays your Collision deductible (in some states).
There are two more very important types of coverage that you might want to explore they are Physical Damage coverages of Comprehensive and Collision.
Comprehensive coverage is also sometimes referred to as “Other Than Collision” or OTC. Comprehensive covers your vehicle in the event of fire, theft, vandalism, hail storm damage or any natural causes minus the deductible you agreed upon when purchasing your insurance. It is also what you would place a claim through for glass breakage or if you run into an animal such as a deer on the roadway.
Collision coverage would cover most other physical damage to your vehicle. Collision covers damage to your car when your car hits, or is hit by, another vehicle, or other object. Pays to fix your vehicle less the deductible you choose. To keep your premiums low, select as large a deductible as you feel comfortable paying out of pocket. For older cars, consider dropping this coverage, since coverage is normally limited to the cash value of your car.
Physical Damage coverages are not required by any state since states are more concerned about your ability as a driver to pay for damages you cause others with your Liability coverages, but if you have a loan or a lease then the lien holder will require it. Even if you paid for your car in cash if you want your own vehicle protected in an accident it is Collision and Comprehensive coverages that you would want on your vehicle to pay for repairs or for the actual cash value if it was found to be a total loss.
Sometimes people refer to their car insurance coverage as “full coverage.” While there is not any real coverage that can cover every situation out there what is being referred to as full coverage is at least the state minimum Liability coverages along with Comprehensive and Collision coverage.
Beyond these basic insurance coverages there are many others you have the option of adding to your policy to protect you in various ways. A couple of ones that are available to help you pay medical expenses include:
There is Personal Injury Protection (PIP) that is required in no-fault states (but also an option in many tort states). PIP covers within the specified limits, the medical, hospital and funeral expenses of the insured, others in his vehicles and pedestrians struck by him. The basic coverage for the insured's own injuries on a first-party basis, without regard to fault. It is only available in certain states. Depending on the state, the covered parties below and the amount of protection may vary.
Medical Payments covers medical expenses to you and your passengers injured in an accident. There may also be coverage if as a pedestrian a vehicle injures you. This coverage applies, regardless as to who is at fault. Medical Payments may also cover policyholders and their family members when they are injured while riding in someone else's car or when a car hits them while on foot or bicycling.
There is a long list of other types of insurance coverages that you can add to a policy. They include Work Loss, Gap insurance, Rental Car Reimbursement, Towing and Labor and Custom Parts and Equipment to just name a few. You can learn about these coverages and more at the CarInsurance.com Learning Center. All coverages are limited to the terms and conditions contained in your specific insurance policy since state laws and insurance company guidelines and terms vary.
All types of coverage are important but the reality of it is what you can afford? Keep in mind your life and your family is very important so having insurance should be one of your main priorities.
With the web easily accessible you have a vast amount of knowledge at your fingertips to help you choose the best coverage for you and your lifestyle. Life is too short, get good advice and get the right insurance coverage for you and your family.
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