Make smart decisions when you shop for auto insurance
Determining what type of coverage to choose on your insurance policy can be a daunting task. Damages from an accident can be varied, you could damage someone else’s car, you or your passengers could get hurt. So what kind of coverage is right for you?
To help you make smart decisions, get acquainted with the following definitions of coverage categories of auto insurance policies:
Bodily Injury Liability: this is what the insurer will pay when other persons are injured or killed in an accident that was your fault.
Personal Injury Protection (PIP): this is what the insurer will pay for your injuries and other related damages and injuries to passengers in your vehicle.
Property Damage Liability: what the insurer will pay when the property of other persons was damaged or destroyed by your vehicle and it was your fault. The provision is not always limited to cars. It could be for property that you drove into, eg a mailbox or garden wall etc.
Collision coverage: the insurer will pay for damages to the insured’s own vehicle, when the insured is at fault. If the vehicle is financed, the lender may require the insured to maintain collision coverage.
Comprehensive coverage: The insurer will pay for damages to the Insured’s vehicle caused by fire, theft, vandalism, riots and other destructive acts. If anything falls on the car, this provision will pay for all repairs.
Uninsured/Underinsured Motorist Coverage (UM/UIM): The insurer will pay for injury or death of the insured and the insured’s passengers if caused by another driver who doesn’t have insurance (uninsured), whose insurance company pays too little (underinsured) or whose identity is unknown (as in a hit and run incident). In some cases the damage to the insured’s vehicle will also be paid for.
It is important to make an educated decision when you decide on the coverage you should have for your vehicle. This will prevent the shock of uncovered damages that you will have to pay out of your own pocket.