Auto insurance coverage is one of those things you pay for every year, but without giving it a second thought unless you\’re the victim of an accident. And in an ideal world that would be the status quo for every car driver or motorcyclist.
But we don\’t live in an ideal world, so the last thing you want is the unpleasant surprise of finding out that your insurance coverage isn’t sufficient to help you recoup your medical and personal losses after the fact. A basic auto insurance package provides financial protection for you or another driver in the case of an accident, but there are many areas which are simply not covered.
So what type of coverage do you have?
The Bare Minimum
In order to be insured, most states require all drivers to have the following types of basic insurance coverage:
Bodily Injury
This covers the costs of injuries, or death, caused to other parties while you or another driver is operating your car. It does not cover any injuries you suffer as a result of the accident.
Property Damage
This pays for any damage caused to property as a result of the accident e.g. the other driver’s car. It also covers damage to fences, guardrails, etc.
As you can see, your basic insurance coverage covers damages to other people or their property, but not you as an injured party.
Damage To Your Car
The biggest misconception drivers have is that their basic insurance covers the cost of any damage to their car, but this is simply not true. You must purchase optional insurance coverage to have your car repaired or replaced after an accident.
Collision Coverage
This type of insurance covers the cost of damage to your car in an at-fault collision with another vehicle, or an object such as a tree.
Comprehensive Coverage
This optional insurance caters for Force Majeure events such as your car being damaged by hail, catching fire, being struck by rocks during a landslide, or any other source of damage that does not involve a day-to-day accident.
Other Types of Liability
There are several other types of optional insurance you might want to consider if you want complete peace of mind.
Uninsured Motorist
Almost 20% of all drivers in many states have no car insurance, so if you’re involved in an accident (typically a hit-and-run) with them, you would have no legal recourse without this optional insurance.
Under-insured
Almost as many drivers again have inadequate insurance cover, which means their insurance policy has lower monetary limits than the amount of damage you sustained as a result of a collision with them.
Medical Payment Coverage
The costs of any accident cannot be measured simply in damage to a car. In the most unfortunate cases parties on either side might receive permanent injuries, or be killed.
Medical Payment Coverage will pay for either the ongoing medical expenses for you and other injured persons, or their funeral expenses.
You cannot afford to simply assume that you have adequate insurance coverage – it could cost you more than you can possibly imagine both personally and financially.