Understanding your Basic Coverage
There are several ways you can purchase Auto Insurance. You can buy Car Insurance over the Internet at literally hundreds of different web sites. You can call an 800 number and buy Car Insurance over the phone directly from an auto insurance company. You can call an insurance agent. In some cases, you can buy it at your bank or credit union. Eventually, you will be able to walk into Wal-Mart to grab some eggs, milk and an Insurance Quote all at the same time.
It’s not surprising you can buy it in so many ways. After all, there are hundreds of insurance companies that sell auto coverage in your area. How do these companies differentiate themselves? Some brag about their superior service when you have a claim. Some tout how easy it is to buy from them; and often, auto insurance companies try to compete on price, just as if you were buying a car, plane ticket, or a computer.
Some people believe that auto insurance is just apiece a paper. It’s not, its something that can protect your financial well being in the event of an accident, whether its your fault or not. This is why it so important to buy insurance from an agent who can understand your situation and design a policy to fit your needs.
How Much Should you Buy?
Most states require that you carry auto insurance, however the State Minimum is very low. In the State of Ohio it is mandatory to carry at least $25,000 for any person involved in an accident with you, $50,000 for a total of all the people in the car, and $25,000 for all damage you have caused.
That means that if you hit someone and there is only one person in that car, your policy will only cover him or her for up to $25,000. Anything over that limit you are responsible for.
It is recommended that you carry enough coverage to protect your financial health. If you do not carry enough coverage your car, house, and future earnings could be at risk.
How far do you think $25,000 will get you if you hit a new car, let alone a Mercedes or a BMW?
The Six Major Auto Insurance Coverage’s
1. Bodily Injury
This pays the medical and other expenses of those people injured or even killed in an accident that you cause. This is a required coverage in the state of Ohio. Those limits are $25,000 per person and $50,000 per accident.
2. Property Damage
This covers the damage that your vehicle causes to someone else’s property. For example the car you re-ended, the house you hit, or the stop sign you hit. This is also a required coverage in the state of Ohio; its minimum limits are $25,000.
3. Medical Payments
This covers the medical expenses you are responsible for in the event you get into an accident and it is your fault. This coverage applies to everyone in you vehicle.
4. Uninsured / Underinsured
This coverage pays for the medical expenses you incur because someone hit you and they either don’t have any insurance or as much insurance as you do. This coverage is often referred as UM/UIM coverage.
For example, if someone hits you and you require $150,000 in medical bills because of the accident and the person that hit you only carries state minimum. In this example the other driver would only pay you $25,000 and you would either A) pay the rest out of pocket or B) Take the other driver to court. However, because you carry Underinsured coverage in your policy and your limits are $250,000 per person and $500,000 per accident you have $225,000 in underinsured coverage available to pay your medical bills.
This covers damage to your car resulting from something other than a collision. For example damage cause by vandals or wind blowing a tree limb on your car. This coverage also applies to hitting a deer.
This covers your vehicle in the event that you collide with another vehicle or object.
Optional Car Insurance Coverage’s
There are some additional coverage’s you can buy to better protect your financial well-being. Towing and road services is a big one. This covers you if your car breaks down and you need a tow, tire change, battery jump, or even gas; certain companies offer different coverage’s for this. Many companies are now going to a reimbursement type of coverage. What this means is that you pay for the tow up front and then the company reimburses you up to a certain amount for the towing services. This is a nice feature in that you can usually choose any tow company and are not stuck waiting around for the carriers company.
Towing and Road services varies with each company, be sure to talk to your agent about what each company covers, how much they cover, and how many times a year you can use the service.
Rental reimbursement is also a very important optional coverage if you are limited on vehicles. This coverage will provide up to your covered limit a rental car while your car is in the shop. This coverage only applies however if a comprehensive or collision claim is filed.
This coverage is usually available in $30, $40 or $50 a day for up to thirty days worth of coverage. If you are used to driving a more luxurious car a higher limit should be selected so that there is enough coverage to provide a rental car of like quality.
Many companies offer other coverage’s such as windshield replacement. Be sure to talk to you agent about an additional coverage’s that might be available.
Do you Have Enough Coverage?
There are many different combinations of coverage that you can carry. It is important that you contact us so that we can discuss which coverage’s fit your needs and make sure there are not any holes in your coverage.
You can buy the state minimum required by law which is $25,000 per persona and $50,000 per accident; or you can buy limits as high as $500,000 per person and $500,000 per accident. Remember that someone you hit can sue you for everything you have. If you own a home, own stock, or have a decent income, you should carry at least limits of $100,000 per persona and $300,000 per accident. However it is always wise to contact us so that we can determine which coverage’s will fit your needs.
Comprehensive / Collision Deductibles
It is important to remember that we can always raise your deductibles to help lower your premium. But remember that the deductible is the portion that you are responsible for in the event of an accident. It is wise to keep your deductibles around a price that you would feel comfortable paying in the event of an accident.
Who is Covered on My Auto Insurance?
All the coverage’s in your auto policy apply when you are driving your vehicle, but they also apply when other people are driving your vehicle. The coverage’s are actually for the car, not the person.
If someone else drivers your vehicle and gets into an accident your coverage’s will pay out first. The drivers own insurance will only payout in the event that you do not have enough coverage. This means that you will now have a claim on your insurance policy.
Comprehensive and Collision stay with the vehicle; they do not follow you when you drive someone else’s vehicle. If you have collision coverage on your car and you are driving someone else’s car that only has liability and get into an accident that is your fault. There is no coverage to get that car fixed.
It is very important to make sure to let us know who has regular access to your vehicles, which includes anyone living in your household. Unless excluded, they would need to be listed on your policy.