What’s Covered in a Basic Car Insurance Policy?

I talk to people every day in greater Lafayette, Indiana that are looking for auto insurance.  We in the insurance business throw around terms like full coverage, liability only, uninsured motorist, and comprehensive deductible.  When you use these terms every day in conversation, sometimes it is hard to remember this is a foreign language to most people.  So I will break it down for you.

Here is what is covered in a Basic Auto Policy:

Liability – Liability insurance coverage helps to protect you and your family against financial loss arising from legal liability if you cause an accident in which someone is hurt or their property is damaged.  These limits are usually expressed as such: 100/300/100 or 250/500/100 and the numbers represent 1000’s.   Liability coverage may help to protect your assets by potentially offsetting some or all of those claims.

Bodily injury liability — This coverage applies to injuries that you (or someone driving the car with your permission) cause to someone else — for example, the driver of the vehicle you hit.

Property damage liability — This coverage pays for damage you (or someone driving the car with your permission) cause to someone else’s property. Typically, this means damage to someone else’s vehicle, but it also might include damage to lamp posts, telephone poles, fences, buildings or other structures caused by your vehicle.

Medical Payments or Personal Injury Protection (PIP) – This coverage pays medical bills for you and your passengers injured in an accident. Costs are covered up to the amount specified by the policy. PIP may cover a broader range of medical costs than standard Medical Payments coverage, such as lost wages. It may also cover funeral costs.

Collision – This auto insurance coverage pays for damage to your car resulting from a collision with another car, object or as a result of flipping over. The coverage reimburses you the amount needed to repair or replace your damaged vehicle, minus the deductible you select. This coverage is required if your vehicle is leased or if you have a loan on the vehicle.

Comprehensive – Comprehensive coverage is for losses to the vehicle resulting from fire, theft, falling objects, riots, storms, earthquakes, floods and collision with a bird or animal. Like Collision coverage, Comprehensive coverage typically includes a deductible which you select. Comprehensive coverage is required if your vehicle is leased or if you have a loan on the vehicle.

Uninsured and Underinsured Motorist Coverage – This coverage will help to reimburse you, your passengers and anyone driving with your permission if your vehicle is hit by an uninsured or hit-and-run driver. Underinsured Motorist coverage comes into play when an at-fault driver has insufficient insurance to pay for your total loss. This coverage also will apply if you are hit as a pedestrian.

Call me so we can review your Lafayette, Indiana coverage. We can discuss any concerns or questions you may have so you can make an informed decision about what coverage might be right for you.