Car Insurance Coverages Explained
A Insurance Article Contributed by Brandie King
Car Insurance Coverages Explained
You know that you have to have car insurance but you do not really know what the different coverages contained in a car insurance policy are. This article will help you to understand some of those coverages, but isn't a comprehensive explanation of all of them. You should talk to your insurance agent and get them to explain your policy in full to you.
Car Insurance Coverage: Liability Insurance
Liability insurance is the part of your policy that will pay for the bodily injury and property damage to others in an accident if you are determined to have been at fault. Bodily injury is what pays for medical bills and lost wages. Property damage is what will pay for the repair and replacement of property you damaged in the accident that didn't belong to you. You should always get more than the minimum required amount of liability insurance, which is different in every state.
If you are at fault in an accident and only have the minimum required amount of liability coverage then you will be required to pay anything over what your policy covers.
Car Insurance Coverage: Collision and Comprehensive (Comp & Collision)
Collision coverage is what will pay to repair your car if you cause an accident. You will not be able to collect an amount that is higher than the actual cash value of your car. You will also have to pay your deductible before you can collect anything from your collision coverage. Comprehensive coverage is what pays for damage to your car that didn't result from an accident. Things that can happen to your car include theft, fire, vandalism, natural disasters, and more.
Once again you will not be able to collect more than the actual cash value of your car and you will have to first pay your deductible.
Car Insurance Coverage: Uninsured and Underinsured Motorists (Um/Uim)
Uninsured motorists coverage is what pays for any injuries you sustain when you are struck by an uninsured motorist or a hit and run motorist. Underinsured motorists coverage is what pays for any damages to you and your car if they cost more than what the other motorist's insurance policy covers.
Car Insurance Coverage: Additional Features
There are several other additional supplemental coverages that you can add to your insurance policy. Rental reimbursement is what will pay for a rental car if your car is stolen or damaged. Towing and Labor will pay for towing costs if your car breaks down.
If your car is totaled or stolen and you still owe money on your car loan, GAP Coverage will pay the loan company the difference between your car's actual cash value and the amount remaining to be paid on your loan. with rental reimbursement and towing and labor coverages, there are usually limits as to how much they will pay. You can request higher limits for these at a higher cost. As you can see, these are all valuable additions to your policy and are all worth the additional costs.
