understanding your insurance policy

understanding your insurance policy

Are You Getting Enough Auto Insurance?

by Tuĝba Van Den Heijkant

One of the big questions that people have when getting auto insurance is if they have enough coverage. Here are some general tips that should help you no matter where you live.

What Is the Bare Minimum You Need for Auto Insurance?

It is always important to look up the bare minimum you need for auto insurance based on your state. Each state has their own requirements, and they can change from year to year. This typically means that you need to carry liability insurance, which protects the other driver if you were to cause an accident. There will be a minimum dollar value of coverage that you need to have for injury, death, and property damage. 

However, the way that you purchased your car can also have an impact on the minimum amount of insurance that you need. If you purchased a car in cash, either new or used, then you do not have any additional requirements for auto insurance. However, it is common for lenders to require that you have collision coverage on your vehicle. This ensures that you do not abandon your car payments if you get into an accident that is not covered because you caused it. With collision coverage, you can get the car repaired when an accident is your fault. 

What Is Comprehensive Coverage?

While your basic auto accidents are covered with liability and collision coverage, you may be wondering how all the other types of damage are covered. That is where comprehensive coverage comes into play. It is designed to pay for all of the damages that are not caused by you or another driver. This includes things like hail damage from a recent storm, a tree falling on your car, your vehicle being involved in a flood, or even hitting a deer that crossed the road unexpectedly. 

Comprehensive coverage is also going to protect you from theft and vandalism. Even though someone else caused the damage, you do not know who that person is. That's where comprehensive coverage can help make sure that you are not out any more money than necessary. 

Do You Need Uninsured Motorist Insurance? 

While it is state law for drivers to carry liability coverage, that does not always mean that every driver on the road has it. If you find yourself in an accident with someone that didn't have the proper coverage, then you can use uninsured motorist coverage to pay for the damage to your vehicle. Even though you could personally sue the other driver for the damages, chances are that it can take a long time to receive that money by going to court and having their wages garnished. 


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understanding your insurance policy

You keep a copy of your insurance policy in your file drawer, but do you know how to read and understand the policy? Having an insurance policy will protect you from losses, but it won't protect you from all losses. To get a better understanding of what your policy will and will not cover, read through this blog. You will learn about all different types of insurance policies and learn the terminology used in the documents that you have read. Hopefully, by the time you have read through the content here, you will know exactly where your insurance policies are lacking so you can make changes.