Auto Insurance Coverage in a Basic Policy
Having an auto insurance policy has become a legal necessity in most states because it protects you from financial losses in property, liability and medication expenses. There are 6 general points of auto insurance coverage in a basic policy. However, some states do not require that you have all– you may still opt to enroll in some, according to your specific needs and priorities. Every auto insurance coverage point has a separate price tag.
Bodily Injury Liability.
This auto insurance coverage refers to the physical injury that the policy holder or driver causes to another party. You may also include in the policy all family members who are active drivers. If you or any of your family members listed in the policy drive another person’s car (with consent from the owner), this coverage may also apply.
Personal Injury Protection.
This auto insurance coverage applies to the treatment of injuries obtained by the policy holder and the passengers of the vehicle. The insurance company is compelled to pay for all medical expenditures incurred in the treatment process of said injuries. To some extent, this coverage may also include lost wages and funeral expenses.
Property Damage Liability
This auto insurance coverage will ensure that the damage you (or another designated driver) effect to another person’s property is rightfully compensated. Typically, this would mean damage to another vehicle but it also includes damage to other properties such as posts, fences, buildings and other structures that you may have crashed into.
Collision
This auto insurance coverage refers to the damage obtained by your vehicle as a result of collision with another vehicle or any road obstacle. Essentially, the insurance company will still pay for the repair of your vehicle even if you are at fault. The Collision Coverage is usually sold with a deductible amount between $250 -$1000. If you choose the highest deductible rate, you also pay for the lowest premium. However, the coverage significantly decreases.
Comprehensive.
This auto insurance coverage applies to the damage obtained by your vehicle by other incidents apart from collision with another vehicle or road obstacle. This will include theft, falling objects, fire, vandalism, animals, and natural disasters such as earthquake, windstorm, flood and hail. Following the same theory in the Collision Coverage, the Comprehensive Coverage is also sold with a deductible amount. Your premium is based on the deductible amount – the higher your deductible, the lower your premium. Both Collision and Comprehensive Coverage are not actually required in most states but when you purchased your vehicle through a loan, your car dealer will insist that you get this type of coverage until the loan is extinguished.
Uninsured and Underinsured Motorist Coverage.
This auto insurance coverage protects you and the members of your family included in the policy when being hit by an uninsured driver, an insured driver with insufficient coverage or worse, by hit-and-run drivers. It also covers for injury sustained in the event of being struck by a vehicle while crossing a pedestrian lane.
