If you own a car, you need auto insurance. But what does auto insurance cover? How much does it cost? How do you know if you have the right amount of coverage? Let’s take a look at everything you need to know about auto insurance so that you can be sure you and your car are protected.
Auto Insurance Coverage
Most auto insurance policies cover the following:
-Bodily injury liability: This covers medical expenses and damages if you are responsible for an accident that injures someone.
-Property damage liability: This covers damage to another person’s property (e.g., their car) if you are responsible for an accident.
-Collision: This covers repair costs for damage to your own car if you are involved in an accident.
-Comprehensive: This covers repair costs for damage to your own car from non-accident events such as theft, vandalism, or weather damage.
-Personal injury protection (PIP): This covers medical expenses for you and your passengers if you are involved in an accident, no matter who is at fault.
-Uninsured/underinsured motorist: This covers repairs costs and medical expenses if you are in an accident caused by a driver who does not have insurance or does not have enough insurance to cover the damages they have caused.
-Roadside assistance: This covers the cost of tow trucks, flat tires, jump starts, and other services if your car breaks down on the side of the road.
-Rental car reimbursement: This reimburses you for the cost of renting a car if your car is damaged in an accident and is being repaired.
-Gap insurance: This covers the difference between what you owe on your car loan and what your car is actually worth if it is totaled in an accident before it is paid off.
Auto Insurance Costs
The cost of auto insurance varies depending on a number of factors such as your age, gender, driving record, the type of car you drive, where you live, and whether or not you have any accidents or traffic violations on your record. In general, however, the average cost of auto insurance is around $1,500 per year.
Deductibles & Limits
Your auto insurance policy will have a deductible, which is the amount of money you will have to pay out of pocket before your insurance company begins to pay for damages. The higher your deductible is, the lower your premium (monthly payment) will be. Your policy will also have limits, which are the maximum amounts that your insurer will pay for each type of coverage. For example, most policies have a limit for bodily injury liability of $100,000 per person/$300,000 per accident. That means that if someone sues you and wins a judgment for $400,000, you would be responsible for paying $100,000 out of pocket because that is the limit set by your policy.
Auto insurance is a necessity if you own a car. But it can be confusing to understand what exactly it covers and how much it costs. By understanding the basics of auto insurance coverage and costs, however, you can be sure that you and your car are properly protected in case of an accident or other incident.