There are a lot of misconceptions out there that can make navigating the ins and outs of the world of insurance complicated. But, it shouldn’t have to be.
Here are some of the most commonly misunderstood terms when it comes to insurance. And, if you have more questions, reach out to our team of experts for a one-on-one discussion.
Bodily Injury Coverage Is Not For You.
One of the most common auto insurance misconceptions is that bodily injury coverage will cover your medical bills following an accident. Since bodily injury is part of your liability coverage, it is designed to cover your liability to another driver, passenger, or pedestrian; not your own incurred expenses.
That being said, if you are injured in an accident and another driver is at fault, your injuries should be covered by the other driver’s bodily injury coverage. However, if you are injured in an accident and you are the driver at fault, personal injury protection (PIP) coverage may cover your medical expenses.
Personal Injury Protection (PIP)
PIP covers injuries only, not damage to cars or other property. Generally, PIP pays for medical coverage for you and passengers in your vehicle along with things like loss of wages while injured. Your PIP coverage limits set the maximum amount that will be paid per person for any combination of covered expenses.
Property Damage Liability
Most states require this coverage because it pays for damage to another vehicle or to other property caused by your car. Property damage liability insurance pays for damages you cause by hitting another car or by hitting something like a mailbox, a light pole or even a storefront. This coverage only pays for damages to another person’s property caused by you. To protect your car, you need collision coverage.
In the dictionary, “comprehensive” refers to all-inclusive. But when it comes to auto insurance coverage, comprehensive has a slightly different meaning. In auto insurance, the word actually refers to coverage limited to your vehicle.
With comprehensive coverage, you’re covered from most things other than a collision with another car. For this reason, some companies refer to comprehensive coverage as ‘other than collision’ coverage. So if your vehicle is stolen, vandalized, damaged by fire, hail or a flood, or if a bird damages your windshield, comprehensive coverage will pay to repair or replace your vehicle.
The deductible is the amount you will have to pay out of pocket for each car insurance claim before your insurance company steps in to pay the claim. As a rule of thumb, the higher your deductible, the lower your premium.
Be sure to check with an insurance agent to see if you’re eligible for any deductions based on individual circumstances and your driving record. When it comes time to choose a coverage plan, your deductible should be based on your personal finances and your ability to pay that deductible if you must make a claim.
Basic full coverage car insurance consists of three primary coverages: liability, collision, and comprehensive.
Liability insurance covers your liability to another driver or pedestrian should they experience vehicle damage or injury in an accident for which you were deemed at fault. Collision covers damage to your vehicle following a collision, and comprehensive fills in the gaps by covering damage to your vehicle caused by anything other than a collision.
Before heading out, make sure you understand what your car insurance covers and what it’s limitations are. Have questions about your coverage options? Use the quick form below to contact one of our insurance experts today.
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