Archive for January, 2010
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18
Jan
2010
Automobile Insurance 101
There is a lot to know about auto insurance in order to fully understand what you’re paying for. The following information provides a quick education to help you navigate the twists, turns and choices involved in buying auto insurance.
Liability
Let’s face it. If you have an auto accident, the legal costs could be devastating. Liability coverage offers protection against claims, property damage or bodily injury to a third party that you or a member of your household accidentally caused while driving your car. This coverage applies only if the driver is considered legally responsible for the damage.
Medical payments
The last thing you need to worry about at the time of an accident is your medical insurance. The medical payments portion of your policy assures that you, your family members and passengers in your car will receive necessary medical and dental services resulting from an auto accident…regardless of who caused the accident. We also provide coverage if you and your family members are involved in an accident as a pedestrian.
Uninsured motorist/Underinsured motorist
Uninsured motorist coverage will pay for injury expenses incurred should you, your family members or passengers be involved in an accident with an uninsured motorist. This coverage also provides protection for a hit-and-run accident or an accident with a driver who has less insurance than required by law.
Underinsured motorist coverage comes into play when the other driver is found legally responsible for an accident and has coverage, but not enough to cover your injuries. If your coverage limits are higher than those of the at-fault driver, this coverage will absorb the additional expenses.
Damage to your car
Collision coverage pays for any damage to your car caused by accidental impact with another vehicle or object…or if your vehicle overturns. The maximum amount to be paid is limited to the actual cash value of your vehicle, which is often referred to as the “local market value,” less the collision deductible. Please remember that the local market value is only a starting point. The actual cost of the car may be more or less depending on the actual condition of the car.
Comprehensive coverage pays for most types of damage to your car resulting from a situation other than a collision. Typical examples include breakage of glass, falling objects, fire, theft, windstorm, hail, water, flood, malicious mischief, vandalism, or impact with a bird or animal. The maximum amount paid is limited to the actual cash value of your vehicle less the “other than collision” deductible.
Situations where damage is not covered. Please be aware that your policy will not pay for damages due to normal wear and tear such as mechanical or electrical breakdowns and flat tires.
Additional, optional coverages
Some coverages are not included as part of the basic auto policy. However, you can customize your policy to your needs by adding the following coverages:
Towing and labor: pays for towing and labor costs each time your car is disabled. Covered labor must be performed at the place where your car is disabled. There’s usually a limit to the dollar amount that will be applied to each loss.
Rental reimbursement: pays for a rental car if your car is damaged by a situation covered by comprehensive or collision coverage and if your car is out of commission for more than 24 hours.