How Much Auto Insurance Do You Really Need: Jeeps and New Moto Auto Assurance Devis

How Much Auto Insurance Do You Really Need?

Types of Auto Insurance and the Ways They Protect You from Natural Disasters, Crazy Drivers and Suicidal Wildlife

Types of Auto Insurance and the Ways They Protect You from Natural Disasters, Crazy Drivers and Suicidal Wildlife

Have you ever heard the saying “Less is more”? Anyone who lives in a high traffic area like San Francisco or NYC where the cars regularly play bumper bowling on the highway (or a rural area inhabited by kamikaze deer) can tell you that philosophy should never apply to your auto insurance. Many people choose to carry only the minimum amount of liability on their vehicles to protect them if they’re ever in an accident without thinking about the possibilities-and the number of natural and unnatural catastrophes that liability doesn’t cover.

When you purchase an auto insurance policy you’re going to be given the option to purchase many types of insurance at varying degrees of coverage. If you’ve never purchased an auto insurance policy before (either because you’re a new driver or because your parents handled it before now) these policy options are about as intelligible as trying to read ancient Greek.

Because no one should ever have to buy an auto insurance policy without knowing what they’re looking at (and what type of auto insurance they really need) we’ve put together a brief, comprehensive guide of the options available to you when you purchase your policy and a non-technical translation of what they all really mean in:

The English Speaker’s Guide to Auto Insurance

Before we get into the types of auto insurance you have to choose from, let’s talk about the difference between want and need; in other words, the difference between what the state says you need to have to drive a vehicle versus what you want to have before taking your car (or truck, or bike, or anything else with wheels and an engine) off its cinder blocks and onto the road. Before you buy any type of auto insurance policy you should be aware what your state minimum requirements are.

Just like every state has its own sales tax, every state also has its own requirements regarding auto insurance.

If you’re not carrying your state minimum insurance the DMV will not let you drive!

How do they know? They’re like the IRS. They might not find out right away, but they’re going to find out sooner or later-and it’s going to be bad when they do.

Some states only require you to carry an uninsured motorist policy; other states require a minimum amount of liability coverage. If you have a car loan your lender will probably require you to have comprehensive and collision insurance on top of your state’s liability requirements. As long as you’re meeting your state and lender minimum requirements you’re approved to drive; however, that doesn’t mean that in an accident you’ll have the protection you need.

Types of Auto Insurance

1)

The average emergency room visit costs $1400 per patient. Hospital stays average $5,000-7,000, and a trip to the ICU can cost as much as $3,000 a day.

Bodily Injury Liability. Bodily injury liability means that if you cause an accident for some reason and the other driver and their passengers (or the bystanders on the sidewalk, if you took a page out of “The Fast and the Furious”) are injured and require medical attention of any kind you’re not going to be left solely responsible for the bills. If you’ve been in an emergency room lately you know how quickly hospital bills can add up. You don’t want to be stuck holding the bag on a $50,000 hospital bill because you rear-ended someone.

2) Property Damage Liability (also known as Property Protection Coverage, or some variation thereof). cars are expensive, and drivers can get pretty cranky when they have to pay to have theirs repaired after an accident. Guess what? Just like their medical bills, you’re legally responsible for the cost of those repairs. Property damage liability will pay for those repairs up to your maximum level of coverage, leaving you with a $200-300 deductible rather than a $25,000 bill.

3) Comprehensive. If you live in a state where ice storms and hurricanes are the norm you’re probably already familiar with comprehensive auto insurance coverage. Comprehensive coverage is what will pay the repair bill on your car when giant chunks of hail break your windshield, or if you park in the wrong part of town one night and come back to find out that someone liked your car as much as you did.

4) Collision. Comprehensive coverage covers natural disasters. For everything else, there’s collision. That probably sounds like a bad MasterCard commercial, but it’s true-and important. Picture this. It’s a cold, snowy night. You’re driving home from work when you hit a patch of black ice, spin off the road and go head-first into a tree or hit a deer or roll into a ditch. It’s going to cost you thousands of dollars just to make your car drivable again-thousands you probably don’t just have sitting around in a savings account waiting for a car accident.

Collision auto insurance coverage will pay for those repairs, and if it’s going to cost you more to fix the car than it cost you to buy the thing in the first place your insurance company will total it and cut you a check for the car’s current resale value. That means you’re not left walking to work for months while you try to save up the money for another one. It also means if you have an auto loan and you total your car you’re not left with a hefty car payment every month for a car you no longer own.

5) Medical. If you have medical insurance already buying it from your auto insurance company is a little redundant. If you don’t, however, many auto insurance providers give you the option to add coverage to your auto policy so that if you’re in an accident that leaves you injured and another driver isn’t footing the bill you’re not stuck flat on your back watching your bank account run dry while the medical bills pile up.

6) Uninsured/Underinsured Motorist. As much as we would love to say it ain’t so, recent studies estimate that 14% of drivers on the road don’t have insurance. Unfortunately, this is legal in some states. Just pay the DMV a fee every year and cross your fingers. The bad news is that when these drivers get into an accident (and they almost always do) trying to get the money for your auto repairs out of their pocket be the rough equivalent of trying to climb Mt. Everest in a bikini and a pair of stiletto heels-difficult, lengthy and very, very painful.

If you have uninsured motorist insurance and you’re involved in an accident with one of these drivers your insurance company will foot the bills for your repairs. Yes, your collision coverage will help with this, but collision usually carries a higher deductible than uninsured motorist coverage (because the auto insurance companies assume that 90% of the time, if you need collision coverage it’s because of something you did). This is usually relatively cheap to add to your policy, and the returns can be tremendous.

That’s it! That wasn’t so bad, was it? Now that you know what type of auto insurance you need, and what all the fine print really means, you’re ready to buy the auto insurance policy that’s right for you.

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How Much Auto Insurance Do You Really Need?

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