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Automobile Insurance Coverage

What is automobile insurance?

Automobile insurance is a contract between an insurer (insurance company) and a policy holder (the insured) that helps pay for damage, bodily injury, or other financial losses due to accidents, fires, theft, vandalism, or other unexpected events.

How much coverage do I need?

The minimum amount of automobile insurance coverage is set by the laws of your particular state.

Can I get more coverage if I elect to do so?

Yes, and it may be a good idea. The minimum coverage will only protect you up to a certain dollar amount. Should you have a major accident and it is deemed your fault, especially if there is bodily harm or death, you may be held responsible for paying all costs that your insurance doesn't cover.

What other coverage is available?

Insurance companies offer policies that include medical payments, physical damage coverage (collision and comprehensive), uninsured or underinsured liability insurance and other riders.

Explain liability, collision, and comprehensive coverage.

Liability insurance covers the insured up to a stated amount if he is sued for damage to another's vehicle or property. The policy should give the maximum amount the insurance company will pay for property damage and bodily injury. It may cover hospitalization and surgical proceedures and give cash settlement to those affected by injury or death.

Collision insurance covers damage to your vehicle if it is overturned and if you are in an accident with another vehicle or other object, regardless to who is at fault. Collision insurance may not cover bodily injury or property damage liability.

Comprehensive insurance covers theft, vandalism, fire, water damage, and other events that are stated in the policy but may not cover collision.

Riders and Endorsements cover towing, rental reimbursement, and certain items such as tires and stereo equipment.

Are all drivers covered under my insurance?

Most insurance policies provide coverage for other licensed drivers but there are some exceptions. It is critical that you check with your insurance company regarding whether or not others who drive your car are covered under your policy.

Do all insurance companies offer the same types of insurance?

It may be wise to ask your insurance agent what his company's insurance policies cover because each company is different and offer different standards of service. You should also read and understand your policy to make sure that you are getting the coverage that you feel you want and need.


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