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Automobile Insurance

     IS YOUR AUTO INSURANCE COVERAGE ENOUGH?

     Summer is here again and people will be getting into their vehicles and driving off on exciting road trips and family vacations. Before you get into your car, though, there are a number of things you need to be prepared for. Other than being prepared to have fun, you need to be prepared for the unexpected as well. If, for example, you get into an accident on this trip, will your car insurance be enough to protect you regardless of who’s at fault? Below are some of the basic coverage you need to consider when purchasing a car insurance policy:

     1) Liability coverage
     Liability coverage will pay for the damage you caused to others during a car accident. It also pays for your legal bills if you cause an accident and the other party sues you. Liability coverage will pay for the following:
        a) Bodily injury liability – This pays for damages the insured caused to others. Damages include medical bills and lost wages.
        b) Property-damage liability – This pays for the repair or replacement of the property that the insured destroyed during the accident. ‘Property’ may include the other car or someone’s fence. It can also pay for pain and suffering damages.

     Liability coverage is written as three numbers, for example 25/50/15. That translates to $25,000 in bodily injury coverage per person, $50,000 in bodily injury coverage per accident and $15,000 in property-damage coverage per accident. These are your liability limits. However, if, for example, you caused $100,000 worth of damage and have an insurance limit of $50,000, you're responsible for the remaining $50,000 and could be personally liable for it. It is always advisable to carry more than the minimum required coverage.

     2) Collision and Comprehensive coverage
     Collision coverage pays to repair your own vehicle in the event of an accident. If your car is considered "totaled" the insurance company will pay you the actual cash value of your car at that time. Buying collision coverage will raise your premium. To keep it down, you can raise your deductible. But if you do get into an accident, you will have to pay the deductible first before coverage takes effect.

     Comprehensive coverage pays for damage to your car that isn't due to car accidents. This includes theft, fire, vandalism, natural disasters and collisions with animals.

     3) Medical Payments
     Medical payments, also called MedPay coverage, pays for the medical expenses incurred by you and your passengers after an accident. It also pays for medical expenses you incur if you were driving someone else’s car with their permission. Or if you were walking on the street and someone’s car hit you, you may also avail of this coverage. Even though MedPay is paid no matter who caused the accident, if someone else is at fault the insurer may seek reimbursement from the party at fault.

     4) Uninsured/underinsured motorist coverage (UM)
     In these hard economic times, more and more drivers are driving without insurance. UM coverage pays for damages to you and your family if the other driver responsible for the accident is uninsured. UM coverage will pay not only for medical bills and loss of earnings but also for the damages for pain and suffering that could have been recovered from the errant driver’s insurance. UM coverage also protects you if the other driver does not have adequate limits in his/her policy. Most drivers only carry the minimum $15,000 coverage. This amount is often not enough if there are serious injuries involved and your bill exceeds $15,000. UM coverage will pay for the remaining amount up to the UM limits. As it protects you and your family, it is advisable to carry higher coverage.

     5) Other Coverage: Car rental, Roadside assistance, Gap coverage
     Although these items may sound unnecessary, they can save you money if you do get into an accident:
        Car rental reimbursement pays for a rental car when your vehicle is damaged or stolen.
Roadside assistance includes towing and labor fees for assistance due to roadside breakdowns.
Gap coverage is usually purchased for a new vehicle. This coverage pays the difference between the actual cash value of the vehicle and the amount left on your car loan if your vehicle is totaled. Just because your car is totaled does not mean you can discontinue your car payments. Unfortunately, property damage liability will only pay for the market value of the car at the time it was totaled. This value may be well below the amount left on the car loan. Gap coverage will take care of the difference.
 

© Law Offices C. Joe Sayas, Jr.