Auto: Liability and Medical Protection

If you’re at fault in an accident that’s covered by your policy, and other people (or property) are injured or damaged, Liability coverage helps protect you from the cost of these damages.

If you’re at fault in an accident, you could be held legally responsible for all medical and repair costs for everyone involved. Liability Coverage can shield you from these potentially devastating expenses.

Protection for People, Property, and the Unexpected Bodily Injury Liability Coverage
If people are injured in an accident that’s your fault, Bodily Injury Liability coverage helps protect you from bills that can include: • Emergency aid at the scene

  • Medical expenses for bodily injury
  • Medical services for sickness or disease
  • Compensation for loss of income
  • Funeral expenses
  • Legal defense fees and/or bail bonds for anyone listed on your policy
  • Other expenses not listed here

If you’re interested in carrying this coverage, but aren’t quite sure how much coverage is right for you, you might want to consider purchasing the highest limit you can comfortably afford.

Property Damage Liability Coverage
If another driver’s property is damaged in an accident that’s your fault, Property Damage can help pay for their:

  • Structural damage to homes, storefronts, etc.
  • Repair or replacement costs for other stationary objects
  • Vehicle repair or replacement costs

It can also help keep your assets safe in the event of a lawsuit resulting from a covered accident. If you’re interested in carrying Property Damage Liability protection, you might want to consider purchasing the highest limit you can comfortably afford.

Other Coverages
Choose any of the following options that might suit your individual circumstances best and build an auto insurance policy that helps fit your needs.

Collision Coverage helps pay for repairs or replacement to your car if you’re in a covered accident that involves other vehicles or stationary objects.

Definition of Collision Coverage
This coverage typically pays for damages if you’re in a covered accident that involves other cars or objects, like a tree or a streetlight.

It’ll usually pay up to the actual cash value of your car, which takes into account things like the purchase price, age, wear and tear.

There’s also a deductible tied to this coverage. A deductible is the amount you have to pay out of your own pocket before an insurance payment would be made.

Choosing Your Deductible Amount
Your deductible depends on a lot of things, but probably the most important factor to consider is — how much would you be comfortable paying out if you had an accident? Deductibles can range anywhere from zero to $1,000.

Another thing to think about — if your car is old and worth close to or less than your deductible, collision coverage may not be right for you.

How Much Does Collision Coverage Cost?
Since accidents are the most common kind of insurance claim, this coverage usually the priciest portion of your total premium cost. But as we mentioned above, an older car that isn’t worth much might not even need this coverage.

If you’re still worried about paying too much every month, try increasing your deductible. It’s the best way to lower your price, but keep in mind how much you’ll need to pay out of your pocket if you have an accident or work with your insurance agent on the best recommendations for your situation.

Comprehensive Coverage helps pay for covered losses caused by natural disasters, theft, vandalism, or other similar events.

Definition of Comprehensive Coverage
This coverage typically pays for damages on covered costs that aren’t caused by a collision. Here are some examples of situations this coverage will protect you in:

  • Storm or natural disasters
  • Vandalism
  • Theft
  • Broken window or windshield
  • Hitting an animal
  • If something falls on your car

The actual cash value of your car is the most that this coverage can pay out — and it factors in things like your car’s purchase price, age, wear and tear.

This coverage also has a deductible. That’s the amount you have to pay out of your own pocket before insurance picks up the rest.

How Much Should Your Comprehensive Deductible Be?
Probably the most important thing to consider when you’re choosing your deductible is your pocketbook. How much can you afford to pay out if your car was damaged? Your deductible can be as little as zero or even higher than $1,000.

And if your car is worth close to or less than your deductible (say if it’s old or beat up) paying for Comprehensive coverage might not make sense for you. Because even if your car was totaled, you still wouldn’t be getting any, or very little payment from insurance.

How Much Does Comprehensive Coverage Cost?
Since vehicle damage is one of the most common kind of insurance claim, this coverage is usually one of the priciest portion of your policy premium costs. But as we mentioned above, an older car that isn’t worth much might not even need this coverage.

If you’re still worried about paying too much every month, try increasing your deductible. It’s the best way to lower your price, but keep in mind how much you’ll need to pay out of your pocket if there’s damage to your car.

Underinsured/Uninsured Motorist Coverage helps protect you if the covered accident was another driver’s fault and he/she either has no auto insurance, or not enough insurance to cover the expenses.

Definition of Uninsured/Underinsured Motorist Coverage
This coverage typically pays for medical expenses and damages to your car resulting from a covered loss with no insurance is at-fault. Here are a few examples of the types of bills that uninsured motorist coverage could take care of:

  • Medical expenses
  • Damage to your car

This Coverage Is Divided Into Two Parts

  • Bodily Injury Coverage — may pay medical expenses for you, your passengers, or any family members who might be driving the car when bodily injuries are caused by an uninsured or underinsured driver.
  • Property Damage Coverage — pays for damages to your car caused by an uninsured or underinsured driver (this coverage is not available in all states).

How Much Should Your Uninsured Motorist Limit Be?
Depending on your situation, you could need potentially as little as $20,000 or as much (or more) as nearly half a million dollars in coverage. It really all depends on your assets, your family and how much risk you’re willing to take. Some people make this limit the same as their Bodily Injury Liability Limit as a general rule of thumb.

How Much Does Uninsured/Underinsured Motorist Coverage Cost?
The good news is, it’s relatively inexpensive compared to some of the other coverages on the policy. Even though you’re getting hundreds of thousands of dollars in coverage, you’ll probably be paying tens of dollars every six months for this powerful protection.

Medical Payments Coverage helps pay medical bills if you or your passengers are hurt in a covered accident. This option may also cover other members of your family when they’re driving the insured car.

Considering your claim is a covered loss (that’s insurance-speak for an accident or incident that falls within the bounds of your policy), Medical Payments coverage helps pay for medical treatment for accident-related injuries, no matter who’s at fault. These costs may include doctor visits, hospital visits and/or stays, surgery, x-rays, EMT and ambulance fees, and other similar expenses. This option covers you, your passengers, and any family members who may be driving the insured car during the accident.

And while nobody likes to think about it, this option also helps cover funeral expenses. Personal Injury Protection typically helps reimburse you for lost income, child care expenses, medical expenses, and other similar things if you’re hurt in a covered accident. (Personal Injury protection is not available in some states)

Definition of Personal Injury Protection Coverage
Personal Injury Protection coverage (also known as PIP), not only covers reasonable and necessary medical and hospital expenses when an insured is involved in a covered loss, it can also help you with other expenses while you’re healing. These vary state to state, but can include:

  • Income continuation
  • Loss of services
  • Funeral expenses
  • Child-care expenses

These expenses might not be part of your budget and may not be covered completely by your health insurance.

How Much Personal Injury Protection Coverage Do I Need?
As a general rule, you should consider purchasing as high a limit as you can afford so that you have additional coverage beyond what your health insurance offers. Some of the factors that may affect the limit you choose include:

  • The high cost of health care
  • Your deductibles or co-payment arrangements
  • Protecting your savings for retirement or education
  • Cost of higher coverage limits

How Much Does Personal Injury Protection Coverage Cost?
PIP isn’t the most expensive coverage on your policy, but it isn’t the cheapest either. It’s one of those in the middle group. What’s great about PIP is that it’s a supplement to your regular health insurance plan. You can decide whether the extra coverage is worth the price you’re quoted.

Limits and Deductibles will apply to certain types of coverage. Your Limits and Deductibles determine how much your insurance company will pay and how much you’ll have to pay when you make a claim for a covered accident.

Building an auto insurance policy that’s right for you takes more than just understanding what you need to cover: it’s also about how much coverage you may need. These decisions can have a big impact on your premiums. Here’s how…

Let’s Start with Your Coverage Limit.

Coverage Limit

  • Your auto insurance coverage limit is the highest dollar amount we’ll pay if you make a claim on a covered loss (that’s insurance-speak for any losses that fall within the bounds of your policy).
  • The higher your coverage limit, the more we may pay, but the higher your premiums will be to obtain that coverage.
  • Lowering your coverage limit is a good way to bring your premiums down and save money now, even if you may need to pay more out-of-pocket later, after an accident. But keep in mind that each situation is unique: be sure to consider your own needs before lowering your coverage.

Summary
The higher you set your coverage limit, the more protection you may have in the event of a covered accident. Alternately, lowering your coverage limit can help you save some money on your premiums.

Now Let’s Look at Your Deductible.

Deductible

  • Your deductible is the amount of money you agree to pay out-of-pocket (on your own, without our help) when you make a claim covered by your policy.
  • This means, for example, that if your repairs cost $1,500 and you’ve set your deductible at $500, theoretically, you’ll pay the first $500, and we’ll pay the remaining $1,000 to get your car fixed and back on the road.
Summary
Setting a higher deductible amount can help keep your auto insurance premiums down. But a lower deductible (with higher premiums) means you’ll pay less out-of-pocket when you make a claim.