The Three Basic parts to an Auto insurance Policy
1: Other Party:
Auto Insurance Bodily Injury (BI) Liability and Property Damage
(PD) coverage is Legally required in most states today. (BI &
PD) Most people understand that they need BI and PD, but they
have no idea how to determine how much coverage they need.
Try this simple question: What if your car was involved in an
auto accident tonight where heaven forbid, someone else was
injured or killed? Remember, everything you own is in the back
seat of the car with you and is at risk in a lawsuit! So, what
do you think their family would sue you for? $15,000? $25,000?
$100,000 or even maybe a Million dollars! Where would you get
the money to pay them?
Perhaps the Equity in your Home would help? How about your
Savings and/or Investments? You could even have up to 25% of
your wages attached to pay the award in most states! Are you
prepared to sacrifice everything you own to pay an award due to
this accident? If not, read on for how to choose the auto
insurance coverage you need.
2: You and Your Family:
Now let's turn the above accident around. For some unfortunate
reason, you or a loved one is the one who is injured or killed
in an auto accident. Where would you get the money if the person
who hit you did not have auto insurance or not enough auto
insurance? Medical bills can be covered if you have
health insurance. But health insurance doesn't cover loss
of life, pain & suffering or permanent disability.
Maybe you have a life insurance policy through your employer or
your own individual life policy. Is the benefit amount
sufficient to cover your family if your loved one is killed? But
even if you have life insurance, what pays for the misery, the
pain and suffering, maybe the fact you or a loved one can't walk
or use their arms again?
You might have a disability insurance policy through your work
if you're lucky or had good financial advice. But disability
insurance doesn't pay for loss of life, pain & suffering,
permanent loss of your legs, arm or hand.
The only coverage that pays for these things is a part of an
auto insurance policy known as Un/Under-insured motorist
coverage. You can only buy as much coverage here as you have in
Liability coverage. Your auto insurance agent should be able to
help you determine the exact amount you need.
3: Your Car
Comprehensive and Collision Coverage are the third part of an
auto insurance policy and are sometimes referred to as "Full
coverage." Basically the difference is this: If you run into the
tree you are covered by Collision coverage. If the tree runs
into you (hypothetically of course), then you are covered by
comprehensive coverage. Comprehensive also covers broken
windshields, fire, theft and vandalism. The higher deductible
(risk) you take here, the lower the premium. Use the savings
here to purchase higher limits in the coverages that protect
your assets and your family.
The bottom line to determining proper
auto insurance coverage
is, of course, the money available in your household budget. An
excellent place to start in determining the proper auto
insurance coverage for your family is to meet with your local
auto insurance agent.
Most cut-rate companies concern themselves with one thing only:
Price. Tell them what coverage you have and they'll see if they
can give you the same coverage for less. You become the
insurance professional. If this is the only need you have then
that is ok. If not, you need to seek the advice of a
professional to help you determine the proper amount of coverage
you need and how best to accomplish it.
Review these tips for
auto insurance coverage to make
sure you have enough to protect your family.
You may reprint this article on your site or in your newsletter
with proper credit to the author and a simple link to
http://www.hometownquotes.com
About the author:
BIO: Matt McWilliams is one of the co-founders of
HometownQuotes.Com, an online insurance quotes web site. He is
originally from Pinebluff, NC and attended Middle Tennessee
State University. He is considered an expert in the field of
online insurance shopping and finding new ways to help consumers
save money on their insurance. For more information visit
http://www.hometownquotes.com
