Coverages in an Auto Policy

Productivity has been given a new dimension with modern conveniences, such as having a car, in this age. It can efficiently take you from place to place, enabling you to do more in less time.

Owning a car, however, also comes with certain responsibilities, such as having car insurance.

This means that even when you find the language about the coverages in an auto policy confusing, it is important to understand some basic concepts, such as what is an insurance deductible.

 

If this is the first time you are taking out car insurance, know that most basic car insurances usually offer the following coverages in an auto policy:

  • Bodily Injury Liability: This covers people, not your car. It provides you the legal protection in case you hurt someone during an accident while driving your vehicle. It is an important coverage that can be particularly useful if there is a lawsuit when a serious accident occurs. You want it to be enough to cover a decision against you without putting your private assets at risk.
  • Property Damage Liability: This is the coverage that will pay off the damage that you or your driver may cause to another person’s property, such as a car, home, fence, and other structures. This can also be an important legal defense geared to protect you if ever you face a lawsuit.
  • Personal Injury Protection (PIP): This is an important coverage for you and your passengers. Also called “Medical Payments,” it is intended to cover or pay the medical cost of the hurt driver and the passengers in your car. In a broad coverage, it may also cover the cost of replacing services and lost remunerations, and if the worst happens, the cost of funeral services.
  • Collision Coverage: If you want the damage to your car to be covered, whether you are at fault or not, make sure you have this coverage. In most insurances, it usually comes with a deductible, ranging from $250 to $1,000. Know what is an insurance deductible by asking the insurer. To lower your premium, the general strategy is to pick a large but comfortable deductible for you.
  • Comprehensive: This can be an expensive coverage with a deductible running from $100 to $300. You can opt to increase your deductible to strategically lower your premium. Despite the cost, it can provide you with a protection against all kinds of possible physical damage resulting from all possible incidents – natural catastrophes, explosion, falling objects, etc. except collision.
  • Uninsured or Underinsured Motorists: This is the coverage that would provide protection against irresponsible drivers who are either under insured, or worse, uninsured. Knowing that there are a large number of these kinds of motorists, it would be a practical coverage you would want to have.

Learning the inadequacy of your coverage is something you don’t want to discover after an accident. No matter how hard you try, road accidents can happen. It can leave your car damaged as well as the other car involved in the collision, hurting you and/or your passengers or those in the other vehicle.

Working like a firewall against a financial disaster, you will appreciate having the right coverages in an auto policy at a time like this.