Car Insurance Coverage 101 – What Is Required And What Is Optional?

Are you confused with what coverage you need on your car insurance policy? Most drivers don’t understand basic auto insurance coverage options and which combination makes sense for them. Today insurance companies try to differentiate themselves from the rest of the pack by coming up with fancy names coverage options. This only confuses the customer when they are trying to compare rates from other companies which is probably the plan all along. I will try to better explain which options you have for car insurance and why you might need them.

As an auto insurance consumer you need to understand the two types of coverage available on any standard car insurance policy.

Required Coverage – Most states have a minimum level of coverage that is legal to own and operate a motor vehicle. This usually includes liability insurance for bodily injury, medical payments and property damage.

Optional Coverage – Beyond what is required to meet state law you have many more options to add-on an auto policy. This optional coverage can provide protection for your vehicle, towing services, and much more.

I will first discuss the details of required coverage and then explore many of the most popular optional coverage features available today.

Required coverage is often referred to as “minimum liability limits” or just “liability insurance”. Each state will have their own set of limits that is required by an owner of a motor vehicle. These limits provide protection for all other drivers in the event of an accident. Here is an explanation of the most common required coverage limits:

  • Bodily Injury – Expenses resulting from other people’s injuries or death for which you are legally responsible. Such expenses include loss of income, medical bills and pain & suffering. Most states will have a minimum limit represented in dollars such as $25,000 in bodily injury per person.
  • Property Damage – Coverage for your liability of damaging another person’s personal property after an accident. Such items can include motor vehicle, house, or fence. Again most states will have a minimum limit represented in dollars such as $15,000 in property damage per accident.
  • Medical Payments – Some states have passed laws requiring medical payments coverage or a waiver must be signed to deny it. This coverage pays for medical expenses if you or a passenger in your vehicle are injured. Sometimes coverage will extend to other vehicles you are riding in up to the amount specified on the policy.
  • Personal Injury Protection (PIP) – In no fault states personal injury protection (PIP) is usually required. This coverage allows for a broader range of medical expenses to be covered over standard medical payments coverage. It can cover lost wages and other medical bills that would not be covered by medical payments.
  • Uninsured/Underinsured Motorist Coverage – This covers you and your passengers in an accident where the at-fault party is either under insured or not insured at all. It will also cover accidents where the other party has hit-and-run you in a vehicle or as a pedestrian. While required in most states it can also be waived in most cases. It is not recommended to waive this type of coverage.

Now that you understand what can be required on auto insurance we will shift our focus to optional coverage items. There are too many options to list them all in this article but I will detail a few popular coverages and what they are used for.

  • Comprehensive coverage – True to its name comprehensive coverage encompasses almost everything besides hitting another object. Common claims would include theft, vandalism, wind damage, hail damage and much more. This type of coverage will have an associated deductible that would be due at the time of the claim. If you have a loan on your vehicle this coverage is generally required by your lender.
  • Collision coverage – The name says it all, collision coverage will protect the vehicle against running into something else including another vehicle or object. Usually this is used after an accident where the driver is at fault for the damage done to the vehicle. A deductible is associated with this coverage and can range from $0 up to $1500. If you have a loan on your vehicle this coverage is generally required by your lender.
  • Roadside assistance/Towing – Most insurance companies offer this coverage for a very small premium and it is one of the most used. From a flat tire to a tow to the nearest repair shop this coverage is worth the price. Expect to pay $20 to $50 per year for this coverage depending on the year, make and model of your car.
  • Rental Car Reimbursement – Each company has a different name for this coverage but in the event you need to rent a vehicle while yours is being repaired this is what you will need. It usually only pays for a rental car if the vehicle is in the shop under a covered claim such as an auto accident. Expect to pay between $50 and $150 year for this coverage depending on the daily limit.
  • Uninsured Motorist Property Damage – Most people don’t realize that even if they have uninsured motorist liability coverage that doesn’t mean your vehicle is covered if someone hits-and-runs. This will provide protection for the vehicle in the event you don’t have collision or comprehensive coverage and the vehicle was hit by an uninsured motorist.
  • Glass coverage – Only a few auto insurance providers offer this coverage but it is a very nice coverage to have. It will replace any glass in the vehicle or repair it for a small or no deductible. Expect to pay $25 to $75 per year for this coverage depending on your vehicle type.

Choosing Family Insurance Coverage – Some Tips

Instead of taking out individual insurance policies many people choose family insurance coverage as a lower cost way to obtain insurance cover for the entire family. For those who have more than one child it is a particularly good buy as premiums are generally the same for two, three or more children. Family insurance coverage can include family health cover and homeowner’s insurance which may cover mortgage payments in case the principal wage earner is unable to work through unemployment, disability or illness.

Adding Children to Employers Health Coverage

It can be very expensive to add a child to an existing health insurance plan offered by employers and you may well be better to take out out a additional family insurance cover, particularly if you have more than one child.

What is Included in Family Insurance Cover?

This type of cover normally provides routine annual medical examinations for any children under 16 (or 18 in some plans) and prenatal care. Some of the policies cover children until the age of 24 provided they are full time students. family insurance plans may also include hospital in patient care including operations, x-rays and lab tests etc. It is important to always check you know precisely what is covered by the plan. You may be able to select maternity coverage for all family members which may possibly be suitable for those with female children. While no one desires teenage pregnancy to take place it can happen and the family insurance can cover this.

Dental Coverage for the Family

A number of insurance policies include family dental coverage or you may perhaps have to to buy separate family dental insurance coverage. These policies differ in the type of cover offered and the age limit for any dependent children. Characteristically the amount of cover that you get is dependent on to the amount of the monthly payments.

Full Time Students

As shown above a lot of insurance plans include children above 18 provided they are in school full time. Insurance cover sometimes extend to twenty three or four. Check that the any campus medical facilities, local physicians, clinics or hospitals are willing to accept the family’s insurance and you would be best to provide the student with an insurance card before they leave for school.

What May Not Be Included

Family insurance coverage might not include some treatments common in childhood, replacement for glasses, allergy tests or braces. Consider the coverage provided by the policy under consideration and think about taking out a savings plan for anything that is covered by your family insurance.

Conclusion

Family insurance coverage may be a good buy for families with more than one child. Although there are some things not covered policies are usually very comprehensive and give good protection for the whole family, including, in many cases, full time students above the age of eighteen.

Review of Car Insurance Coverage For Uninsured and Under-Insured Motorists in the US

Car insurance coverage comparison is becoming very popular in USA. The economic downturn is bringing about unexpected changes in most walks of life and insurance is one of them. As per the Insurance Information Institute one driver out of every seven in the US is believed to have no automobile insurance. This would mean that 14% of the drivers are uninsured and only 86% drivers are insured. The drivers who are going for insurance have to face broad repercussions which arise out of uninsured motorist coverage. Car insurance comparison becomes very important for those who are taking insurance to verify whether they have taken the uninsured motorist and under insured motorist.

The uninsured motorist and under-insured motorist insurance is separate, although in many states they can or must be purchased together. They are also better known in abbreviated form as UM or UIM. It is natural that you would not think about or know exactly what the uninsured or under insured motorist indemnity is, unless you fall into such a situation. If you have opted for uninsured motorist than this will pay you for any loss or damage you may incur when you have a hit-and – run accident or when you collide with an uninsured motorist. A motorist can be uninsured when he has no insurance coverage, or whose claim the insurance company denied or was not able to financially meet with the obligations of loss. The uninsured motorist indemnity will also protect you if you are hit by a car as a pedestrian.

The under-insured motorist coverage pays you for any loss or damage when the motorist with whom you have collided is under-insured. The motorist in this case is insured but his limits of insurance are lower than the actual loss you have sustained. These coverages will pay you and your passengers for any bodily injuries are caused when the under-insured motorist or uninsured motorist is legally liable for this. In certain states the coverage for property damage is also paid under this coverage. Both these insurance pay you for your medical bills, reimburse for the lost wages if you miss work and you can also seek redress for pain and suffering resulting from the crash.

In 12 states the no fault insurance laws are prevalent. The no-fault insurance coverage is very similar to the uninsured motorist coverage. No-fault coverage gives certain compensation when you are not at fault and the driver at fault is uninsured. You can collect the benefits from your own insurance companies. Nevertheless, in the states where no-fault law prevails, going for uninsured motorist coverage is cost effective and beneficial since it provides an additional layer of financial support. Accidents can turn out to be more ghastly or long lasting than what they seem at first.

Only five of the states that insist their drivers carry Uninsured Motorist also mandate the purchase of this coverage; they are: Connecticut, Maine, Minnesota, North Carolina and Vermont. If you live in any state other than those that have compulsory coverage, a prudent person like you should go for car insurance coverage and buy under-insured and uninsured motorist coverage. The cost for this car insurance coverage of uninsured motorist is quite nominal. This is a very positive factor to consider when taking this coverage. With a little extra cost you can save yourself from any financial problems at a later date. In these economic times if would serve you since many drivers are either uninsured or under-insured.

You should compare car insurance coverage and if you do not have this coverage you can seek to take this coverage. Compare car insurance quote for the best coverage and rates. It always pays you to be alert and make informed decisions when it comes to car insurance.