Understanding Insurance Policies
Understanding Basic Auto Insurance Coverage
Samantha Reynolds
States require that you obtain auto insurance to cover expenses in the event of an accident. If you're a first time driver, the various policies may seem confusing at first glance. For the typical driver, basic coverage is usually enough. However, it's crucial to know what the basic policy covers. Here's what most basic auto policies cover.
Collision
In the event of an accident, collision insurance covers any damage to your car, regardless of who is deemed at fault. Most policies also cover non-accident damage, such as damage from going over potholes. Deductibles for collision range any where from $250 to $1,200. If you have an accident and the other driver is deemed at fault, most insurance companies will aim to recover the cost from the other driver's insurance company. If this happens, your deductible will be reimbursed.
Property Damage Liability
If you have an accident where you're deemed at fault, property damage liability helps cover the cost of repairing the other driver's vehicle. Or, if you damage property as a result of the accident, this coverage helps pay for those damages. For example, if you damage a fence as a result of a car accident, property damage liability helps to have the fence repaired or replaced. The amount of coverage you need varies. Each state mandates a minimum amount. For example, California drivers are required to have a minimum of $5,000 in property liability coverage.
Bodily Injury Liability
When you're found responsible for an auto accident, bodily injury liability covers injuries you, as the designated driver, cause to another person. This includes medical expenses, as well as pain and suffering. It also covers any loss of income the other person experienced as a result of being out of work due to injury. As with property damage liability, states require that you carry a minimum amount of coverage. New York requires motorists to carry at least $25,000 in coverage for bodily injury caused to one person and $50,000 for all persons.
Comprehensive
Other risks outside of accidents are covered in basic insurance policies. This is where comprehensive coverage comes in. If you experience loss due to theft, damage from vandalism, or even damage from nature, such as a fallen tree, or earthquake, comprehensive insurance reimburses you. Your deductible will run anywhere from $100 to $300. However, keep in mind that you have the option of choosing a higher deductible, which will reduce your premium.
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After I moved out of my parent's home, I started learning more and more about insurance policies. I was involved in a bad car accident, and I ended up working with my car insurance company as well as my medical and dental insurance companies. I paid my premiums and enjoyed coverage, but I didn't really understand how the entire insurance claim process worked. I wanted to make this blog to help other people like me to learn more about insurance coverage. Check out this blog for more details on insurance coverage, how to file a claim, and what you should expect throughout the shopping process.