Auto Insurance 101: Learn your insurance in 5 minutes or less!
Auto insurance- we all have it but only a few of us understand what it covers. Some buy insurance because it is required to be on the road. Others buy insurance to manage risk of a future catastrophe. Perish the thought, that future comes to be, and terror strikes. I am here to tell you the true horror is finding out your insurance does not cover everything you thought it did. Or the driver that hit you does not have insurance to cover your damages. Now you are left with mounting health bills with a damaged vehicle and wondering what is next. You have failed to manage your risk correctly. Give this a read and you will learn the basics of what your auto insurance covers in under 5 minutes. If you use the information below to help you understand what kind of insurance to purchase, you will have managed your risk correctly.
Nearly every state requires car owners to carry auto liability coverage. The amount of liability coverage required varies state to state.[1] This coverage exists solely to pay for bodily injuries and car damages to another driver you may hit. Thus, if you only have liability coverage, your insurance will not pay you if involved in an accident.
The coverages discussed below are non-mandatory purchases that cover you in an accident where the other driver’s coverage may be inadequate (your bills are higher than the minimum insurance they purchased) or in instances where the other driver flat out did not have insurance (it happens).
Let’s begin with the ones that cover medical bills.
1. Uninsured/underinsured motorist coverage– like the name indicates, this covers you if you’re hit by someone who did not have insurance or did not have enough to pay your bills. It also pays if you’re in a hit-and-run accident.
2. Personal injury protection (PIP) coverage – this coverage is an important addition to a full coverage policy and pays for your and your passengers’ medical bills as well as lost wages and other nonmedical costs.
3. Medical payments (Medpay) coverage – this coverage is similar to PIP above as it pays for your and your passengers’ medical bills. However, this coverage also pays if you’re hurt while riding in someone else’s car or while walking or biking. It is an additional coverage you can purchase offered with the understanding that medical bills tend to be enormous.
The two below, if purchased, will cover vehicle damages.
4. Collision Coverage – this coverage pays to repair or replace your car after an accident whether it is damaged or destroyed. It is a no-fault coverage meaning it will cover these costs even if you are at fault.
5. Comprehensive Coverage – this is also no-fault insurance and will cover damages to your vehicle that are out of your control and related to something other than a car accident, such as if your car is stolen or damaged by fire, flood, or vandalism.
These are additional type of coverages most insurance companies offer for a few dollars increase in your monthly premiums.
6. Rental reimbursement coverage – like the name indicates, this covers you to rent a car if yours is stolen or being repaired after an accident.
7. Towing and labor coverage – like the name indicates, this pays to tow your car if it can’t be driven and for labor to change a flat tire or jump-start your battery.
Now, I challenge you all to look at your insurance policy and find out what is covered. Get rid of what you don’t need and add the coverage that best fits your need. You may not need all 8 of the coverages discussed but you should consider the Uninsured/underinsured motorist coverage option or PIP coverage.
If you have been injured by another driver’s negligence, The Law Office of Ruthe Belachew, PLLC is ready to advocate on your behalf. We are not only interested in making sure you are fully protected before the accident by purchasing the right insurance, but we also work diligently to ensure you have a winning case and get you the maximum recovery you deserve!
Call us at (945) 900-2529
[1] Texas law requires you to have at least $30,000 of coverage for injuries per person, up to a total of $60,000 per accident, and $25,000 of coverage for property damage. This liability coverage is called 30/60/25 coverage.
