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travelers auto insurance guide |
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Understanding Auto Insurance
By Jim
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Learn everything you need to know about your
policy
You are required by law to carry
in the state where your vehicles are registered (it is
required in almost all 50 states). Everyone has it, but hardly anyone
understands the provisions or coverages outlined in their policy.
is extremely important, because it not only covers you and
your vehicles, but it also covers your liability associated with
damages you cause to other persons or property.
There are
several important coverages that you need to understand. The first
coverage you will see listed is called bodily injury liability. This is
the amount of liability coverage you have for injuries you cause to
other people in an accident. It is sometimes listed as a split limit,
in which case the first number is the amount of liability you have per
person, and the second number is the maximum total amount of money your
policy will pay for all injured persons. It is considered customary to
maintain at least $100,000 of bodily injury liability per person, and
$300,000 per accident.
Sometimes, bodily injury is grouped
together with property damage liability (property damage is damage that
you do to other vehicles or property in an accident) and listed as one
number. This is known as a combined single limit. It is recommended to
maintain $300,000 of combined single limit liability for your bodily
injury and property damage.
The next coverage you will see
listed is called uninsured/underinsured motorists liability. This
number should be equal to the liability you have for bodily injury and
property damage. This coverage is mandatory in most states. It covers
you if you are involved in an accident and the other driver was
at-fault, but that other driver either does not have insurance or their
coverage is not adequate to compensate you for your damages.
Uninsured/Underinsured motorist coverage kicks in to fill in the gaps.
After uninsured motorist coverage you should see something called personal injury protection (PIP). Some states
required
this coverage, some do not. In states that require it, it is best to
maintain $250,000 of PIP coverage. Those states that do not require it
may have different laws that mandate health insurance to cover any and
all injuries associated with an auto accident. You should contact your
agent if your policy is not clear on this; if PIP coverage is required
in your state, make sure you have it.
Right underneath or in
the vicinity of PIP you might see something called Additional PIP. Some
states make this available while others do not. Additional PIP provides
you with a certain level of income up to a certain maximum amount to
help make up for lost wages if you are disabled as a result of an auto
accident and unable to work. Additional PIP also includes a certain
amount for funeral expenses that would be incurred by your family if
you are killed in an accident. If you do not have Additional PIP
coverage on your policy, call your agent immediately and find out if it
is available.
The next items listed on your policy are
comprehensive and collision coverage. Comprehensive covers you for
damage done to your vehicle when caused by things such as fire, theft,
a rock hitting the car, or hitting an animal on the road. Collision
pays for damage to your vehicle when the cause is an accident involving
a collision with another car or other object on or near the road.
Comprehensive and collision coverage is normally subject to a
deductible, which you should see listed on your policy.
The
final two coverages listed on your auto policy are rental reimbursement
and towing. Rental reimbursement pays you a certain amount per day to
cover expenses associated with having to rent a car if your vehicle has
become disabled following an accident. Towing coverage, as the name
suggests, covers your towing expense when your car is towed following
an accident.
I hope this has helped you to understand your
policy. Even though almost everyone who has a car has
insurance, most people have no idea what it covers. Then when it comes
time to file a claim, they find that their policy does not meet their
needs sufficiently. Use the information that was presented here to help
you make intelligent choices so you can be prepared if something
happens. |
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