Insurance 101 – Personal Auto Coverages

Liability coverage, collision coverage, uninsured motorist, medical payments? But I just need car insurance. Purchasing car insurance seems simple enough, but when you really start shopping, it can feel overwhelming. Let’s break down the four basic coverages of the standard personal auto policy.

Liability coverage provides you with the coverage you need in the event that you are at fault in an automobile accident. This coverage offers 2 types of protection: coverage for injuries to other people and coverage for damage to someone else’s property while you or a family member are operating any automobile. So if you accidentally hit someone else’s car and enter the other driver, your liability coverage would pay for not only the covered damages to their vehicle, but also for the medical expenses related to their injuries. And yes, I said their injuries not your own, which leads us to our second coverage, medical payments coverage.

Because liability coverage only provides coverage for injuries cause to the other people involved, you’ll need medical payments coverage to help pay medical expenses related to injury sustained by you or your passengers in an accident. This coverage comes into play no matter who is at fault.

The third part of personal auto insurance is Uninsured Motorsist coverage or UM coverage. UM coverage protects you if you’re involved in an accident with someone who breaks the law by not carrying their own out of liability insurance. It does this by helping pay for any medical expenses you incur as a result of getting hi by an uninsured driver. And although it may not sound fair, these types of accidents do happen. According to statistics, nearly one and seven drivers on the road is uninsured, which makes protecting yourself an absolute necessity.

In many states, you can also purchase additional protection called under insured motorist coverage. Under insured motorist coverage provides you with additional protection for when the other driver has insurance coverage, but just not enough to fully cover all of your medical expenses.

By now you may be wondering how you’re going to pay for damages to your own car. That’s where the 4th and final part of your auto policy comes into play, coverage for damage to your car, also known as physical damage coverage. It pays for direct an accidental loss to your vehicle.

There are two parts to physical damage coverage Collision for when your car impact another vehicle or object or is upset in other than collision with covers almost any other type of direct accidental loss not excluded by your policy.

As I said, the details of insurance can be confusing. This above is just a short overview of the forming parts of the standard auto insurance policy. To ask questions and learn more about the exclusions and limitations that may apply, be sure to contact your local independent insurance agent, right?

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