Auto Insurance - A Smorgasbord of Coverage
Auto Insurance
Coverage
From the many types of auto
coverage available, it can be truly
mind
boggling to try and figure out which
ones you need and which ones you
don’t need. Here is a breakdown of
the major types of insurance
available – some optional, some
mandatory – that will give you at
least
a jumping-off place toward your fun
and exciting Adventures in Auto
Insurance.
How Art Thou Covered? Let Me Count
the Ways
Liability
There are two types of liability
insurance: bodily injury and
property
damage. Don’t get defensive, because
everyone knows you’d never do
anything like this intentionally,
but bodily injury liability
insurance
covers your legal fees and any
claims against you if your car is
responsible for the death or injury
of someone. This coverage is
applicable to you, your family
members, and other people you’ve
given
permission to drive your car, as
foolish or reckless as they may be
(and
you, too, for having let a nutball
drive your car).
Property liability insurance,
conversely, does the same, except it
is
for the property of others that is
damaged or destroyed by your car.
Almost all states require by law
that you carry liability insurance,
and
those states that do not have other
laws requiring proof of financial
responsibility and other ways of
making sure an accident victim’s
well-being is taken care of, but
don’t worry, they don’t include
allowing the injured party to call
you an idiot to your face for
running
into them.
Personal Injury Protection (PIP) or
No-Fault
Fifteen states including Florida,
Maryland, Michigan, Massachusetts,
New
York and New Jersey also require
that you buy Personal Injury
Protection
(PIP). This type of insurance pays
for the cost of injuries to you or
your passengers regardless of who
was at fault in an accident. PIP
also
applies if you or a member of your
family is injured in some other
automobile other than your own or
even if one of you is hit by a
vehicle
while walking. Wages lost due to
accident-related injuries are also
an
important coverage provided by PIP.
This kind of insurance prevents the
necessity for legal proceedings to
determine who’s to blame for an
accident, but does not prevent an
angry motorist who’s taller than you
from calling you – you guessed it –
a PIPsqueak.
Collision
While not mandatory, it’s good to
have this coverage to pay for
repairs
to your car if it’s in a collision,
regardless of which party is at
fault (and no one's even implying it
might be yours).
Comprehensive
Like its name, this coverage
comprehensively covers your car for
theft,
fire, vandalism, or damage resulting
from weather, such as hail, wind,
or lightning – just about anything
that can happen to your vehicle
outside of a car accident or laying
into it yourself with a baseball bat
because it won’t start.
Uninsured Motorist
Not all states require this type of
coverage by law, so in order to
protect yourself, it’s wise to have
it in the event you, your family, or
anyone you’ve given permission to
drive your car is hurt or killed by
an
uninsured or hit-and-run driver
(read: nutball attack).
Underinsured Motorist
This type of coverage pays for
claims against bodily injury or
death
when caused by a driver whose
liability coverage is not enough to
cover
the incurred losses. Have this to
protect yourself and your loved ones
further from nutball attacks.
Rental Reimbursement – This one’s
pretty self-explanatory even for the
insurance lingo-challenged: If your
car is damaged due to an accident, a
daily allowance toward a rental car
is provided.
It’s All About the Money – and the
Stuff
It’s a hassle, and it’s work, and
you’d rather be lazing away on a
tropical island, but the best way to
figure out how much to spend on
insurance begins with buckling down
and learning your state laws and
then examining your own personal
needs. Liability insurance, since
it’s
the most widely mandated coverage,
is almost always where to begin. But
keep in mind that minimum liability
coverage may not be enough, and if
you injure someone, your personal
assets (assuming you have any) could
be at risk. Can you afford to lose
any or all of those assets in the
event of an accident that’s your
fault? If all you have is that
beat-up
heap you call a car, the clothes on
your back, and a smile, then why pay
more than you have to? But since it
is such a gamble with the majority
of people who actually do have
homes, cars, bank accounts and other
major assets, most insurers offer a
lot more protection for just a
little more money.
Making a Comprehensive Collision
Decision
Can you afford to replace your car
if it was totaled? If you can't, you
need comprehensive and collision
insurance. Buying this coverage is a
decision usually based on your car’s
value. In most cases, if your car
is worth less than $2,000, it won't
be worth it to buy comprehensive and
collision coverage. If your car is
worth, say, $50,000, however, it
would be crazy NOT to pay an extra
$200 or so annually to ensure its
replacement if you get in a serious
accident.
Read Those Other Policies
Other types of insurance, such as
health insurance and homeowners
insurance, may pay for damages due
to an auto accident. For example, if
your health insurance is a
comprehensive package, paying more
than the
state-required minimum for PIP would
be unnecessary, unless you’re some
kind of a – you guessed it --
PIPfreak.
Gamblin’ and Ramblin’
In a nutshell, the only way to
intelligently figure out your auto
insurance needs is to take a hard
look at policies you’re seriously
considering then decide how much you
are willing to gamble. After all,
it’s not worth it to purchase
collision insurance if your car is
worth a
whopping $300 in a hot seller’s
market. All auto insurance is really
about is how much you are willing
and able to pay out of your own
pocket
versus how much you’re willing to
pay the insurance company to cover
your mishaps and the mishaps that
happen to you. Once you decide this,
you're all set to purchase your auto
insurance policy and hit the road –
(just try not to GET hit).
|
Check out our brand new,
extensive and complete
Auto Insurance Guide
|
