It takes only a moment of inattentiveness for a good driver to cause an accident. Drivers that neglect to purchase auto insurance can be financially devastated, liable for hundreds, and even thousands, of dollars in bodily and property damage caused by just one mishap. Vehicle owners lacking collision insurance may be forced to pay out-of-pocket for repairs to their own vehicles, or may have to write-off their vehicles as complete losses when damages render a car inoperable.
Lending institutions require that any vehicle used as collateral carry a minimum amount of insurance. The lender needs assurance that a damaged vehicle’s value will be restored. Additionally, most states require coverage on all registered vehicles.
When shopping for auto insurance, vehicle owners have different types and levels of coverage from which to select:
Bodily injury liability
This covers the driver’s liability for injury to others. It includes medical expenses and damages that may arise from a lawsuit.
Property damage liability
A driver that damages another’s vehicle or property, for example, driving into a neighbor’s fence, is responsible for the cost of repairs. Property damage liability covers these costs.
This pays the medical expenses of the insured and passengers in the insured’s vehicle. In some states, policies may include personal injury protection to cover lost wages, funeral expenses and other costs.
This pays for damage to the insured’s vehicle caused by an accident. This coverage will pay for the cost of the repair, or will pay the value of the vehicle less salvage value, which ever amount is lower. Collision coverage usually has a deductible, an amount the insured must pay towards repair costs. Policies with low deductibles will have higher premiums than those with higher deductibles. Some auto policies provide glass coverage with no deductible.
This covers theft and damage to the insured’s car that is not caused by an accident. Incidents such as a baseball through the windshield or hailstone damage to a car roof would be paid for under the comprehensive coverage. Like collision, comprehensive coverage will have a deductible.
Alston & Associates
6234 Georgia Ave. NW
Washington DC, 20011