Here's everything you need to know about
Auto Insurance !
What is Auto Insurance?
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Auto insurance
can seem confusing. But once you understand the different types of coverages
that make up your policy, it’s not hard at all. Your auto insurance
is really a package of seven primary coverages. Taken together, these
coverages make up a standard auto policy. Each of these coverages has
its own separate premium. Your premium payment is the total of these
separate premiums.
In addition
to the primary coverages, for additional premiums you can also add on
coverages such as GEICO’s Mechanical Breakdown Insurance and Emergency
Road Service.
Bodily
injury liability provides protection if you injure or kill someone while
operating your car. It also provides for a legal defense if another
party in the accident files a lawsuit against you.
In the
event of a serious accident, you want enough insurance to cover a judgment
against you in a lawsuit, without jeopardizing your personal assets.
- Bodily
injury liability covers injury to people, not your vehicle. Therefore
it’s a good idea to have the same level of coverage for all of your
cars.
- Medical
payments, no-fault or personal injury protection coverage usually
pays for the medical expenses of the injured driver and passengers
in your car. There may also be coverage if you are injured by a vehicle
as a pedestrian.
- Uninsured
motorists coverage pays for your injuries caused by an uninsured
driver or, in some states, a hit-and-run driver, in a crash that is
not your fault. In some states there is also uninsured motorist coverage
for damage to your vehicle.
Given the large number of uninsured motorists, this is very important
coverage to have, even in states with no-fault insurance.
- Comprehensive
physical damage coverage pays for losses resulting from incidents
other than collision. For example, comprehensive insurance covers
damage to your car if it is stolen; or damaged by flood, fire or animals.
To keep your premiums low, select as high a deductible as you feel
comfortable paying out of pocket.
- Collision
coverage pays for damage to your car when your car hits, or is
hit by, another vehicle or other object.
To keep your premiums low, select as large a deductible as you feel
comfortable paying out of pocket. For older cars, consider dropping
this coverage, since coverage is normally limited to the cash value
of your car.
- Property
damage liability protects you if your car damages someone else’s
property. It also provides you with legal defense if another party
files a lawsuit against you. It is a good idea to purchase enough
of this insurance to cover the amount of damage your car might do
to another vehicle or object.
- Rental
reimbursement coverage pays for a rental vehicle (usually up to
$20 a day) when the insured's vehicle is out of commission as a result
of a loss covered under comprehensive or collision coverages.
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