Car Insurances

This article is not only for someone getting auto insurance for the first time, it’s for anyone paying for auto insurance. By the time you get through this article, you should have a basic understanding of the types of auto insurance coverages available. You can then add or delete certain coverages to your policy based on your needs.

Don’t you remember that as you approached the legal driving age, you heard, sometimes very loudly from your parents, how expensive auto insurance was. If you have kids that already are or will be driving soon, you’ve likely made this same comment to them. Most of us have had terror struck in their hearts about what the insurance company might not cover. And especially, what would happen if you did get in an accident. However, what you rarely have heard are the subtle little provisions that could save you BIG money if you need it.

It really helps if you know the basic coverages that are in your auto insurance policy. For example it’s important to know that the bodily injury and property limits are your LIABILITY to the other driver if you are ruled to be at fault. You will collect nothing under this coverage. And we all know that collision coverage is for your car if you damage it, less the deductible that you’ve elected to pay yourself. Comprehensive auto insurance basically covers what happens to your car while you are NOT driving it. But what about Medical Payments? The auto insurance company pays your Medical bills ONLY, if you are injured. BUT, it also covers you if you are injured near your car, on your way to your car, or from your car to your house. Many states offer Personal Injury Protection (PIP), which pays the medical bills. But it also covers the ‘little’ things, like hiring someone to clean house, cook, do the things you usually do but now can’t do because of the accident you were in. In some states you can even buy BOTH Medical Payments and PIP on the same auto insurance policy.

Who pays for the personal things that you have in your car? I can tell you from personal experience and from talking to my insurance company recently, the auto insurance company won’t pay for personal things in your car! Unless an item in your car can be considered an accessory, or something only to be used in the vehicle, you will have to look to your homeowner’s policy for reimbursement. However, I strongly recommend that you DON’T call your homeowner’s insurance company unless you are SURE that the loss is more than your deductible. Trust me, sometimes it seems like the insurance companies are making a list, checking it twice and then grabbing as much of your paycheck as possible.

Why is it important to know what you don’t get with your auto insurance policy? Did you know that you can get a rental car when your car is in for repairs after an accident? Well, this is true, but only if you have ‘Rental Reimbursement’ on your policy. If you don’t have this coverage, you get no rental car. A good insurance agent or company will point this out to you, oftentimes a telephone operator might not! More and more cities are enacting ‘mandatory towing’ laws. If you break down in a high traffic area, you will be towed whether you want it or not. And in most cities, you will be billed. So who pays? If you selected ‘towing and labor’ coverage, then your auto insurance company will. Otherwise, you will have to cough up the money yourself. This is why I carry AAA. AAA provides for free towing for a limited distance (usually to the closest service station).

Let’s face it. Auto insurance is just like exercise. Painful, but necessary. And if you don’t do your own homework, you may be caught short because someone wanted to give a low rate instead of making sure you were fully covered. Read what you are purchasing. Consider your options, and what will happen without a particular auto insurance coverage. Then pray that you will never have to use your insurance!

Dan Lyne has been driving cars and insured for 25 years. He’s been in a few accidents and had to use his auto insurance, so he’s learned all about the coverage he currently has. You can find more information about auto insurance and personal finance issues, by clicking on the previous links and checking out the sites he frequently contributes to.

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