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  • What kind of auto insurance do I need?
  • July 8, 2015
  • Worters recommends at least $100,000 of bodily injury coverage per person and $300,000 of bodily injury per accident. As for property damage liability, most insurance professionals recommend at least $50,000 of coverage per accident.

    “Anyone who has a home should not be buying the minimum limits of the state they live in,” said Lynn Knauf, spokesperson for Property Casualty Insurers Association of American (PCIAA). “If the claim is high enough and it goes over their limit, they may have to tap into their assets to pay the remainder of the damage or injury costs.”

    What is collision coverage? Collision coverage is not required by law, but bank lenders may require you to purchase it if you still have a loan on your car. Unlike liability coverage, which pays for damages you caused to other vehicles or property, collision coverage pays for repairs to your vehicle after an accident, according to PCIAA. Collision coverage is generally sold with a $250 to $1,000 deductible, according to III. The higher deductible you choose, the lower your premium.

    What is comprehensive coverage? Comprehensive coverage is also not required by law, but may be required by your bank if you still have a loan on your car. It pays for damage that was not the result of a car accident. This can include losses due to theft or damage caused by contact with an animal. For example, if a tree fell on your car and damaged the roof and windshield, this type of insurance would have you covered. According to III, it also covers losses due to fire, falling objects, missiles, explosions, earthquakes, windstorms, hail, flood and vandalism. Collision coverage is generally sold with a deductible between $100 to $300, according to III. Again, you may choose a higher deductible to save money on your premium.

    What is uninsured (UM) and underinsured (UIM) motorist coverage? As the name suggests, uninsured motorist coverage protects you from uninsured and hit-and-run drivers. Underinsured coverage protects you from other drivers who have insurance but with low coverage levels. For example, let’s say you’re involved in a car accident that is not your fault and your car suffers $12,000 worth of damage. But the other driver has insurance with a limit of $10,000. If you don’t have under insured motorist coverage, you would have to pay the difference.

    What is MedPay or Personal Injury Protection (PIP) coverage? According to III, medical payments insurance (known as MedPay) is coverage in which the insurance company agrees to reimburse you and others up to a certain limit for medical or funeral expenses as a result of bodily injury or death by accident. Payments are without regard to fault.

    PIP coverage covers the treatment of injuries to the driver and passengers of the policy holder’s car, according to III.

    Knauf recommends getting MedPay if you do not have health insurance.

    “If you’re injured in an accident and it has been determined that it’s your fault, the other person’s liability isn’t going to cover your medical expenses,” Knauf said. “It’s best to have MedPay, especially if you don’t have health insurance. If you have a health insurance, most states require or make it optional for drivers to get a minimum amount of medical coverage.”

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