In most states, you are required to have car insurance. This is one of the expenses that goes along with getting your driver’s license, and owning a vehicle. It is important to understand what your car insurance does, and does not cover. Learning this after you have been involved in a car accident is an unpleasant way to find out that you didn’t have enough car insurance coverage.
If you have had your car insurance for a while, you might want to talk to your insurance agent, and review your policy. This is a good way to find out about new discounts that they offer and to figure out if you have purchased the right amount of coverage.
In general, a basic car insurance policy will include the following things: bodily injury liability, medical payments and personal injury protection, property damage liability, and collision coverage. Not all car insurance policies are the same, however. Details differ from one company to the next. The more money you are spending per month on car insurance, the more coverage you are getting. Lower monthly payments generally equal less coverage.
What do each of these parts cover if you get into a car accident? Bodily injury insurance covers the cost of treating injuries that the people in the other car, (or cars), received because of the accident which were caused by you, (or your car).
Your state may have a part of the insurance called Medical Payments, or a part called Personal Injury Protection (PIP), or both. This part pays for the injuries to you, as well as to the other passengers that were in your car when the accident happened. PIP might also cover “lost wages”. If you or your passengers has an injury that prevents a person from going back to work for a while, this part of the insurance pays for the wages they would have earned, but could not. Sometimes, the PIP will cover other related expenses, or funeral costs.
Property damage liability covers the damage that you cause to someone else’s property. This is the part that pays for the necessary repairs to the other person’s car. It can also cover the damage to a mailbox, fence, or other objects that were damaged when the accident happened.
Collision coverage is the part that pays for the necessary repairs to your car if you hit another car, if you roll your car, or if you slide off the road and into a ditch due to weather conditions. There is usually a deductible involved, which means that you will have to pay for a certain amount of these repairs out of your own pocket before your insurance company will begin to pay for repairs.
Sometimes, car insurance policies will cover other things as well. These might include the cost of a tow if you car has broken down, or the cost of opening your doors if you have accidentally locked your keys inside.
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