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Auto Insurance Coverage Explained

If you own a car, chances are you have a personal automobile policy. Auto insurance covers an automobile operated for personal use. The basic policy coverage is made up of four main parts: Liability,Medical Payments,Uninsured and Underinsured Motorists,Coverage for Damage to Your Auto (Comprehensive and Collision).

Liability compensates the driver of the other car and its passengers for bodily injury or property damage you cause. It also compensates the passengers in your own car. The policy limits may be purchased as either a single limit or as split limits. A single limit is a flat amount that is the maximum that the company will pay out for any one accident. A split limit is basically three separate limits. For example, a person with limits of 25/50/25 would have coverage for up to $25,000 for bodily injury to any one individual, up to $50,000 of coverage for all bodily injury in any one accident, and up to $25,000 of coverage for property damage in any one accident. This coverage is required in most states. This is where you need to determine how much you should purchase based on the assets you have to protect. If you own a home and have a good chunk of it paid off, you should consider that as a factor. The charge for higher limits is not much more than the minimum required so ask your insurance agent for multiple quotes.

Medical Payments pays for the medical and funeral costs associated with an accident by an insured. Med Pay will pay to you, your family, or anybody occupying your car if you’re hurt while occupying a vehicle, or to you and your family if you’re hurt as a pedestrian due to an automobile. This coverage pays without regard to fault. In many cases you may already have coverage if you have a good health, life and disability policy.

Uninsured & Underinsured compensates you for your bodily injury where the other driver is found to be responsible for the accident but doesn’t have insurance or has too little insurance. It is usually recommended by insurance agents that you choose uninsured motorists bodily injury (UMBI) limits up to your liability limits. In most states, you can also cover damage to your auto with uninsured motorists property damage (UMPD). If you are already carrying collision on your vehicle, you may find that UMPD is unnecessary.

Coverage for Damage to Your Auto, or comprehensive and collision compensates you for your car. Collision is the impact of your auto with another vehicle or object. The vehicle does not have to be moving to have a collision. Collision pays for the cost of repairs or the replacement of your car. With most companies, you cannot buy collision without buying comprehensive. Comprehensive coverage compensates you for damage to your car caused by most things that collision doesn’t cover. Some examples are natural disasters, vandalism, falling objects or theft. You will need to select a deductible which is the amount that they deduct from the payment to you. The higher the deductible, the lower the cost. If you have an older car, you may not want to carry any of this coverage as the cost over a couple of years may be more than your car is worth.

For more information visit Duxbury & Ray Insurance Agency, Inc.