Understanding Auto Insurance
Understanding Your RV and Auto Insurance Terms
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Reading and understanding auto insurance policies can be like trying to decipher advanced mathematics. It is not really that difficult if you understand some basic basic terms. Collision, Comprehensive, Bodily Injury Liability and Property Injury Liability are the primary terms you need to fully grasp and understand.
You will need Collision Coverage if your vehicle collides with another vehicle or property. You will need this coverage for repairs or replacements. The higher the deductible you choose, the lower your premiums will cost. If you are at fault for something, of course it would still be an accident. I doubt you'd plan to run into a guard rail, but it happens. How much would you be able to afford to pay out of pocket for repairs? $250? $500? $1,000? Just like medical insurance, you'd have to pay that deductible amount first and then the insurance company would pay for the remaining expenses for the repair.
Another term you need to know is Comprehensive Coverage. This coverage pays for damage caused from fire, falling objects, some natural disasters, theft and vandalism. Deductibles work the same way as they did with Collision. The more out of pocket costs you cover, the less your insurance premium will be.
You need to know how much Collision and Comprehensive coverage you have. Additionally you'll want to know about your liability coverage. If you rear-end another driver, your liability coverage will kick in and pay for the damages that you caused with your insured vehicle. The same applies if , your foot slips off the brake pedal onto the gas pedal and you plow down a mailbox. Your Your liability coverage will, or could, include bodily injury to others and property damage.
You do not want to be without Bodily Injury Coverage. If you are at fault in an accident involving injuries to others you need this coverage. If others need to go to the hospital or lose wages from missing work, because of an accident, those costs would come out of your pocket if you are not insured with Bodily Injury Coverage. You can easily imagine how quickly those amounts can add up in today's economy. This type of coverage can also help you in the event the other party takes legal action against you. Many states require you to carry Bodily Injury Coverage.
The other part of liability includes Property Damage Coverage. Can you imagine how much it would cost if you accidentally drove into the side of someone's home? You would not want to be caught without property damage insurance. Should you need to pay for repairs to another vehicle, building or anything you might hit property damage coverage helps cover these expenses. As with Bodily Injury coverage, Property Damage coverage helps protect you in the event lawsuit stemming from an accident.
Every policy has its limits and degrees of coverage. It's important that you understand the basics of what you are paying for and why it is necessary. No one plans for an accident, so be prepared with adequate insurance coverage!
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