When trying to decide what types of coverage you might need for your car, questions may come up. While it's always best to talk to your local agent, here are some answers to basic questions about car insurance.
1. What's the Difference Between Bodily Injury and Medical Payments Coverage?
For one thing, bodily injury coverage is part of your state’s required liability coverage. If you are legally liable for an accident that caused injures to someone else, this coverage helps with the cost of the injured party’s medical bills up to your policy limits. It may even help cover things like court costs, legal defense fees and bail.
Medical payments coverage (which may be called Personal Injury Protection or “PIP” coverage in a few states) is not a type of liability coverage. Medical payments coverage is optional, but PIP coverage may be required by some states. These coverages may help pay medical, dental or funeral expenses for yourself or your passengers if injured in an automobile accident, regardless of who is at fault.
2.Does My Auto Insurance Pay if Someone Else is Driving My Car?
This isn't a question with a simple "yes" or "no" answer. Liability coverage in most states covers the driver, while comprehensive and collision cover the car. The reason for this is simple: the cost of liability insurance is generally based on a driver's past driving record, in part, and how they are expected to drive in the future based on that history. Comprehensive and collision are not typically based on a particular driver's behavior. It's smart to make sure that anyone who drives your car has a car and car insurance of their own that covers you when they drive your car, or is a named insured on your policy.
3. Will My Insurance Pay to Fix My Car if Someone Without Insurance Hits Me?
It depends. Uninsured motorist coverage is optional in most states. If you included that when you bought your policy, you may be covered, subject to the policy’s provisions and your limits of coverage. If you didn't, you won't, unless you add the coverage. The same holds true for underinsured motorist coverage which helps if the person who hit you doesn't have enough insurance coverage. Despite a certain amount of liability insurance being required by most states, there are still uninsured or underinsured drivers on the road. Do you want the risk of footing the bill if one of them hits you?
4. Do I Need Comprehensive and Collision?
If your car is financed, your lender probably requires you to carry comprehensive and collision, but if you don't owe any money on your car, it's up to you. Consider the value of the car, the cost of your premiums and how much it would take to fix or replace it if you ran off the road, there was a flood, a tornado, if a tree fell on it or if it was stolen. Would you have enough money to pay the full cost to get it fixed, go buy another car or make a monthly payment? How much money could you have sold the car for before the damage occurred? Was there any trade-in value left? Compare all of that to the extra cost of adding comprehensive and collision coverage to your policy to help you make your decision.
5. Will My Insurance Cover My Vehicle if it is Damaged in a Flood?
The answer is simple—if you carry comprehensive coverage, you will be covered up to policy limits for amounts above your deductible.
6. Will My Personal Auto Policy Cover My Business Auto?
No. Business vehicles generally need higher liability limits because your business's assets could be at stake if you or an employee are held liable for an accident in that vehicle. Because of this, most states require you to carry business auto liability insurance. Talk to your agent about specific details.
Talking to your local Shelter agent is the best way to get answers to your coverage questions, and it's always a good idea to read your policy. Understanding your policy is the key to having the coverage you need when you need it.
Note: All coverage is subject to your policy provisions. Some types of property are not covered at all, and some types of losses are not covered. The policy purchased and the facts of each claim will control coverage. This article may not show all coverages that are available. In the event of a conflict between the policy purchased and this article, the policy's provisions will prevail.
