Before you purchase your next auto insurance coverage, look over your policy and check your coverage. Many people don’t understand all the names and numbers that they see so it’s best to review the policy a bit.
The first part of the policy statement of coverage covers the damage to your car. The coverage has two sections, comprehensive and collision. Both have a deductible, an amount you pay before the insurance company pays.
Collision is an accident. You hit the garage; you hit another car or collide with a pedestrian. The coverage repairs your car. Comprehensive covers just about everything else that damages your car, including theft or a fallen tree. If you have a loan on your vehicle, then the lending institution requires that you carry this type of coverage.
The most important part of the policy coverage and required in all states, is the liability section. This section pays for the other driver’s injuries and vehicle if you caused the accident. There are several areas in the liability section.
The first area is bodily injury. This coverage makes payment for medical expense people injured in an accident that you caused. The coverage includes coverage for representation if that person decides to sue. This is broken down into two sections, per person maximum and per occurrence maximum. The coverage shows up on your policy in number form, such as 25/50/10, and is the first two of three numbers. Some policies simply show a maximum paid for both bodily injury and property damage and expressed as a single number like $100,000.
The next area of liability is property damage to others. If your car runs into another car, a fence or causes any type of accident, any damage caused to the other vehicle or property comes from this section. It is the third number in 20/40/10.
The last section of the liability portion is medical payments to others. This coverage includes the driver, passengers and even covers you as a pedestrian if you or a family member has injuries from a hit and run.
The final is the uninsured/underinsured motorist coverage. Just like your liability coverage, it takes the place of the other driver’s lack of insurance to cover you.
Most people get the minimum coverage on liability when they really need higher limits. No one knows how much an accident costs until it occurs. The cost of medical care increases each day and $25,000 barely scratches the surface. If more than two people receive injuries, the amount available to each person is even less. Too little insurance puts the burden of a large bill back into the lap of the driver. If someone receives an injury that causes permanent damage, then this small amount of insurance doesn’t come close to the cost of any settlement. The difference in cost between higher limits is minimal but crucial. Vehicles today cost well over $10,000 and with minimum coverage, the driver pays the difference.
Consider increasing the uninsured/underinsured portion also. If the potential exists for you to cause more damage to another, then the possibility exists that someone else could injure you in the same manner. Again, the increase in premium is not that great.
Check your coverage today and see if you think that it covers the expense for a major accident. If the answer is no, start by calling your agent to see how much your insurance company charges to increase the coverage. It’s better to save money on your insurance by checking with other companies and getting competitive quotes, than select inadequate auto insurance coverage.