Thursday 22 March 2012
Wednesday 21 March 2012
Know the Indispensable Nature of Auto Insurance Coverage
If you own a car, then you must know how crucial auto insurance is. By law auto insurance is unavoidable, but this means just to buy the minimum amount of liability insurance required by a particular state. However, auto insurance is far more extensive than just covering the liability costs. If you need total protection from the various costs related to an auto accident, then it's very important to know the various angles of auto insurance coverage. Read on to know the importance of auto insurance coverage and how auto insurance benefits you in various ways.
Types of auto insurance coverage
Buying the suitable amount of auto insurance coverage can really protect you from the financial hazards related to accidents.
Following are the basic coverage that you can get in a typical auto insurance policy:
Bodily injury liability (BI):
This coverage pays for the physical damage that you cause to others in an accident. BI covers the medical bills, pain and suffering and lost wages of the injured party from your side. This coverage also protects you from the cost incurred by lawsuits, if the other party chooses to sue you for their suffered damage. In a tort state, this is the only way of receiving reimbursement in an accident, from the at-fault driver.
Property damage liability (PD):
This covers the liability costs for others' damaged property. If you cause any kind of property damage of the other party, ranging from their vehicle to house or garden fence, PD pays for the loss on your behalf.
Medpay or Personal injury protection (PIP):
This part of the coverage looks after your own medical bills that may arise as a result of an accident related injury. PIP covers you, your passengers and all your permitted drivers for suffered loss. Apart from medical expenses, it also covers for lost wages, funeral expenses and child-care expenses, depending on the policy.
In "no-fault" states, you can get reimbursement for all the above mentioned losses, even if the other party is at fault. This means you don't have to wait for fault determination or lose time in suing the other party to cover for your loss. However, you are free to file a lawsuit, if your losses are higher than the compensation received up to your PIP limit.
Collision coverage:
This coverage pays for the damages suffered by your own car in an accident. Due to collision of vehicles, if your car is damaged, this coverage kicks in, after you pay the deductibles.
Comprehensive coverage:
Collision of vehicles is not only the cause that can harm your vehicle. If your car is damaged due to some other events like fire, theft, vandalism, hail and storm, etc, comprehensive coverage pays to cover for the damage.
Uninsured/Underinsured motorists coverage (UM/UIM):
This coverage pays for your loss, if you suffer in an accident caused by an uninsured or minimally insured driver. This coverage also pays, in case you get victimized in a hit and run situation or by a 'phantom vehicle'.
auto insurance benefits are the most vital to consider, if you possess a vehicle and are worried about your own and your passengers' safety. Understanding your needs and buying appropriate coverage is thus the best thing you can do, before you hit the road.
4.It is not a wise idea to go for individual plans
Most of the people prefer to go for employer's group health insurance plans. They think that individual health insurance plans are quite expensive. But this is not always true. It is said that a steady rise in the cost of the employer's group health insurance plans has been seen in the last few years. A lot of employers have been forced to reduce the benefits due to the rapid increase in the premium rates. Apart from that, the employers are required to follow the state health insurance laws by any means. This implies that you'll have to take up the coverage you don't even need.
However, if you go for individual health plans, then you can purchase the coverage as per your needs. You can purchase coverage as per your health condition. You won't have to spend extra money for the coverage you won't even require in future.
Finally, a lot of people think that the maximum number of uninsured people is below 25 years. Well, this is not exactly true. Statistics reveal that the most of the uninsured people are between 30 and 50 years.
Author Bio: Juanita Martinez is a longtime contributor and Moderator of the Ampminsure community. She is a financial writer, specializing in the field of insurance. You can reach-out to her through the ampminsure community for insurance related queries.
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