There are many things to consider when shopping for, purchasing, or buying auto insurance. Here are just a few helpful bits of information to help you sort things out.
Liability Coverage – This includes bodily injury and property damage and it covers damages you cause to others.
If you’re at fault in an accident, liability covers damages you cause. That could mean damage to other vehicles, property (mailbox, street sign, house, etc.), or even other drivers’ passengers’ injuries. Plus, this covers you if someone sues you over an accident.
Example: You hit another car from the rear, it’s damaged, the other driver is severely injured, and sues you. The insurance company pays for the other driver’s car repairs, injuries, and your costs from the lawsuit (up to the amounts you select). There’s no deductible for liability.
Comprehensive and Collision Coverage – This includes damage to your car.
To be clear, these are two separate coverages: comprehensive covers random acts of nature beyond your control (falling trees, hail, theft, fire, floods, glass damage, etc.) and collision covers car accidents.
Example (Comprehensive): You park your car outside and not undercover during a major hailstorm, and it’s totaled. Add comprehensive and we’ll pay out for the full value of your car (minus your deductible amount). Example (Collision): You back out of your garage, hit your basketball hoop and cause $2,000 worth of damage to your vehicle. Add collision and we’ll then pay for your repairs (minus your deductible amount).
Uninsured / Underinsured Motorist Coverage – This covers your injuries and damages.
Again, these can be two separate coverages: one that covers your injuries (bodily injury) and another that covers your vehicle’s damages (property damage). Both kick in if a driver hits you and doesn’t have insurance or enough to pay for your losses.
Example: Another driver runs a red light and hits you. They’re at fault and don’t have insurance. If they can’t or refuse to pay for your damages, you can instead file a claim with us. We’ll then pay for your repairs.
Medical Payments Coverage – This covers your injuries.
This coverage pays for medical costs if you, your passengers, or your family members are injured in an accident (no matter who is driving). This can be beneficial even if you have health insurance, as there is no deductible you have to meet before we pay out.
Example: Your newly-licensed 16-year-old neighbor is driving your child to school, and they’re in an accident. Your child is injured and has a $1,000 medical bill. Instead of filing a claim with your health insurer, you can file with us and we’ll simply pay the bill (up to your limit). No deductible applies.
Rental Car Reimbursement Coverage – This covers rental car fees.
This coverage pays for your rental car fees while your vehicle is being repaired from a covered loss (that just means damages we or another insurance company pays for and not general maintenance).
Example: Your car is severely damaged in an accident, and repairs will take a week, so you need a rental. Add this and we’ll pay for your rental car fees (up to your limits).
Loan / Lease Payoff Coverage – This helps pay off your loan when your car is totaled.
Loan / Lease payoff is also called gap insurance. If your car is totaled, your provider helps pay off the balance of your loan (up to 125% of your vehicle’s current value typically).
Important Example: You finance $30,000 for a new car. The second you drive it off the lot, it could only be worth $25,000. If your car is totaled, you’re still responsible for the $30,000 on the loan. Add this and your carrier would pay about $25,000 for your car + the $5,000 left on your loan.
Shopping for car insurance for your vehicle can be tricky and confusing. These are a few tips to help you out.