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Do You Understand Your Auto Insurance Coverage? Let’s Break It Down

By August 21, 2020April 27th, 2023No Comments

So you know you have to have auto insurance, but do you know exactly what your insurance covers? Let me break it down for you so you know exactly what you’re paying for each month!

Bodily Injury Liability – This covers costs associated with injuries and death that you or another driver causes while driving your car.

Property Damage Liability – This coverage will reimburse others for damage that you or another driver operating your car causes to another vehicle or other property, such as a fence, building or utility pole.

The above 2 are mandatory in almost every state.

Medical Payments – Provides reimbursement for medical expenses for injuries to you or your passengers. It will also cover lost wages and other related expenses.

Uninsured Motorist Coverage – Reimburses you when an accident is caused by an uninsured motorist—or in the case of a hit-and-run. You can also purchase underinsured motorist coverage, which will cover costs when another driver lacks adequate coverage to pay the costs of a serious accident.

The above 2 are optional in most states but are recommended to give you the best coverage!

Collison – This optional coverage reimburses you for damage to your car that occurs as a result of a collision with another vehicle or other object. It will also cover damage from potholes or if you roll your car.

Comprehensive – This provides coverage against theft and damage caused by an incident other than a collision, such as fire, flood, vandalism, hail, falling rocks or trees and other hazards—even getting hit by an asteroid!

Glass Coverage – Windshield damage is common, and some auto policies include no-deductible glass coverage, which also includes side windows, rear windows and glass sunroofs. Or you can buy supplemental glass coverage.

The above coverages are optional, but highly recommended of course :)

Gap Insurance – If you lease or finance your vehicle, auto dealers or lenders will likely require you to purchase collision and comprehensive. But keep in mind that collision and comprehensive only cover the market value of your car, not what you paid for it—and new cars depreciate quickly. If your car is totaled or stolen, there may be a “gap” between what you owe on the vehicle and your insurance coverage