How auto insurance works
Although auto insurance coverage comes in many forms, its primary purpose is to protect you against financial loss. When you hear auto insurance, you may reflexively think of accidents or collisions. However, this is only one of the roles that insurance plays in protecting you on and off the road.
An auto insurance policy is comprised of six different kinds of coverage. Most states require you to buy insurance, but not all, of these coverages. If you’re financing a car, your lender may also have additional requirements.
Auto insurance is essential to protect yourself financially:
- Forget about accidents for a second. What do you do if your car is stolen?
- If you or any passengers are injured in an accident, medical costs can be extremely expensive.
- If you or your car is responsible for damage or injury to others, you may be sued far beyond your means.
How important is uninsured driver protection?
In the best circumstances, both drivers involved in an accident have insurance. Why does this matter? Because in most cases, after reports are filed, both drivers’ insurance companies hash out the details and determine who owes what.
Comparatively, when an uninsured motorist collides with your vehicle, collecting payment is up to you. And you can bet that if they can’t afford insurance, they can’t pay for your new paintjob. For these reasons, even if insurance isn’t mandatory in your state, uninsured driver protection definitely deserves your consideration.
Auto insurance provides property, liability and medical coverage:
- Property coverage pays for damage to or theft of your car.
- Liability coverage pays for your legal responsibility to others for bodily injury or property damage.
- Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.
- Most auto policies extend to six months or a year.
- Most insurance companies inform you by mail when it’s time to renew the policy and to pay your premium.
Questions to ask Your agent
Your independent agent is an advocate for finding you the right auto insurance. Here are a few things to consider before speaking to an agent:
- How much can you afford to pay if you get in an accident? (To keep premiums low, you may want to have a higher deductible and be willing to pay more for repairs.)
- What discounts are available? (Ask about good driver, multiple policy and student discounts.)
- What’s the procedure for filing and settling a claim? (Ask who to call and what happens after you file a claim.)
- What’s the insurance company’s level of service and ability to pay claims?
For more information regarding auto insurance policies, contact us today. We look forward to hearing from you.