Knowing what a car insurance policy covers is an important part of getting the best coverage. Read on for details on common things included in auto insurance policies.
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The bodily injury liability portion of your car insurance policy details how much the insurance company will pay if injury occurs as a result of an accident. Contrary to popular belief, the amount an insurance will pay for an accident-injury victim is not unlimited. There are minimum bodily injury liability amounts set by state law. Part of the amount that you pay for car insurance depends on how much you want the company to cover for bodily injury.
With basic car insurance without collision coverage, you and your passengers are not covered by your insurance company if you cause an accident, hit an inanimate object like a light pole, or slip on ice and end up in a ditch. It also means that damage to your vehicle in those instances is not covered. With collision coverage, you, your passengers, and your vehicle are covered for injury and damages when you are at fault. Collision coverage usually also covers damage to your car caused by hit and run accidents. If you have an older car it may not be financially prudent to add collision coverage to your car insurance policy.
Uninsured motorist coverage is what covers you in case of an accident caused by a driver without insurance. If you do not have uninsured motorist coverage and you get into an accident and are injured, you will have to cover your own medical costs if the other driver is not insured. Some states require insurance companies to add uninsured motorist coverage to your policy, but in other states this coverage is voluntary. It is recommended that you do add this to your policy if your state does not require it.
Theft coverage for your vehicle is good to include in your policy if you have a newer vehicle. Be aware that theft coverage usually does not cover the replacement cost of your vehicle. If you have coverage for theft and your car is stolen, your insurance company will likely determine the value of your vehicle. This means you may not get enough to fully cover the cost of replacing your vehicle. Also, if you have an older car, it is probably that the added cost of theft coverage is not worth the amount you would get if the car is stolen.
Many people think that car insurance covers theft or damage of personal property in the car. Most car insurance policies do not cover this type of property, but your homeowners or renters insurance does. If, for example, your shopping bags are stolen from your car while hitting another store, you can file a claim with your homeowners or renters insurance company. If your car insurance policy does cover theft or loss of personal property, you can only file a claim on one policy even if two different policies cover the theft.
Education is the key to making good decisions about car insurance coverage. Use this information to evaluate your current coverage or deciding on a new auto insurance policy.