Auto insurance is not usually as straight forward as many would like it to be. It is extremely important to pick the right coverage for your policy. What is the point of paying for a insurance policy which actually leaves you underinsured? At the same time, having to pay for unnecessary coverage is really a waste of money. A lot of people pay too much for auto insurance without even being aware of it..
It is extremely important to comprehend the basic principles. Firstly, you need to know that your policy is in fact a package of different types of coverage. Subsequently, there are types of cover which are required by the state you live in. Generally they are Bodily injury liability (BIL), Personal injury protection (PIP) and Property damage liability (PDL) coverage. In different states different minimum limits are required.
Bodily injury liability – if you kill or hurt someone while operating your motor vehicle, the BIL part of your policy will give you protection. Besides that, if another party chooses to sue you after an car accident you have caused, Bodily injury liability coverage will provide for legal defense. A severe accident may become very costly so its wise to have plenty of cover to shield your personal assets. BIL is not about your automobile, but rather potential personal injuries to other individuals. If you have more than one motor vehicle, try to keep the BIL coverage the same for all of them.
Property damage liability – this part of the insurance policy is intended to cover other people’s property damaged during an automobile accident. If you end up in a scenario where another party is suing you for property damages you have caused, PDL gives you legal defense.
Personal injury protection – in some states closely connected with No-fault. It covers the medical bills for the people in your car, including the driver. Some insurance policies include protection for injuries suffered as a pedestrian.
Industry experts often recommend purchasing more cover than the state’s required minimum.
Additional Vehicle Insurance Coverage
Wondering what other types of cover may be useful? It really depends on what kind of vehicle you drive and where you reside, but here are a few of the most popular ones:
Uninsured motorist coverage – it doesn’t come as a surprise that the number of drivers without insurance has increased recently. It can be blamed on the economy or the lack of social responsibility, but either way you need to look after yourself and your famil. Uninsured motorists coverage is highly recommended and not that expensive in most states.
Comprehensive physical damage coverage – if you want your motor vehicle to be covered against fire, flood or theft, this is the coverage you need to have. Take into account the price of your vehicle before adding such cover and decide if its worth it or not. The cost of this coverage really depends on the deductible you are comfortable having.
Collision coverage – if you hit another vehicle or object, or even if you are hit yourself by another vehicle, the cost of car repairs will be covered by collision coverage. Once again, only really worth it if you drive a newer vehicle and your deductible comes into play.
These are practically the main coverages that you need. So now you can make an educated choice which cover you need and which one is pointless for you. Always go with more than the minimum required and consult an insurance expert if in doubt.