Understanding Your Auto Insurance Coverage

When choosing auto insurance, there are a lot of unfamiliar terms that can make it very difficult to decide which plan is right for you.

First, you must determine what level of insurance is required by your state. Any local insurance agent can help you understand your state’s rules and requirements. If you are already familiar with most of the terms then you can check out https://www.410injury.com/ to learn about the different rules and regulations that are there in every state along with the process of filing and claiming your insurance.

Here’s a list of some common insurance terms that may help you better communicate with your insurance agent:

Premium: This is the amount you pay each month. It varies based on what state you are in, your age, what kind of car you drive, your driving history, level of coverage, etc. Higher premiums generally mean that you’ll pay less out of pocket in the event of an accident or claim. Basically, the higher your premium, the lower your deductible.

Deductible: This is the amount you have to pay before your car insurance kicks in once you have a claim. For example, if your deductible is $500, and you get into a fender bender that did $600 worth of damage, you would be responsible for the $500 deductible. The insurance company would cover the remaining $100.

Collision Insurance: If you get in an accident, and it is your fault, collision insurance will cover the damage done to your car and any other property that was harmed.

Liability Insurance: If you get in an auto accident, and it is your fault, liability coverage pays for the medical care of the injured parties and also provides legal counsel if needed.

Limit of Liability: This is the amount that your car insurance company will cover you or those injured by you in the event of an accident. In many policies, the amount they are willing to pay for property damage is different than the amount they will pay in medical bills. The more you pay each month in your premium, the higher your limit of liability will be. Anything over this amount must be paid by you, out of pocket.

Comprehensive Insurance: This covers you in the event of a natural disaster (flood, fire, wind damage, etc). It also provides coverage against theft or vandalism.

Uninsured Motorist Insurance: While it is the law to have auto insurance if you are driving, there are many people out there who aren’t covered. If an uninsured motorist hits you, this insurance will cover any personal or property damage.

Rental Reimbursement: If you have rental reimbursement on your policy and get in an accident that lands your car in the shop, your insurance company will reimburse the amount you spent on a rental car.

Total Loss: If your car is deemed a total loss (a.k.a. totaled), then that means that the car is damaged beyond repair. It can also mean that the cost to fix the car is more than the car is worth.

Always read the fine print and understand your policy in as much detail as possible. Read over the limits of your coverage so that you know what to expect in the event of an accident.

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