Reader’s Question:
Ok, so I’m looking to get my very first auto insurance and have even phoned some agents here in Idaho, but I still have no real idea how auto insurance policies work! Can you help?
Mick
Pocatello, ID
Basically, the purpose of auto insurance is to protect you from a variety of vehicle and driving related events that can cause you to incur financial loss. To do that, your typical auto insurance coverage would include the following:
Bodily Injury Liability
Covers you from paying medical, hospitalization, rehabilitation costs and even death benefits for people you injure during an auto accident. every state requires their drivers to carry a minimum amount of this while driving.
Property Damage Liability
Pays for monetary liability you incur should you damage or destroy property during an auto accident. Likewise, every state has minimum requirements for this for drivers.
Collision & Comprehensive
Collision pays for the repairs on damages or even the complete loss of your vehicle. Comprehensive does the same thing but for non-collision related events (fire, theft, vandalism, loss due to natural disasters etc).
Personal Injury Protection (PIP)
This auto insurance coverage covers you and your passengers for the following: medical costs, hospitalization and rehabilitation costs, covers lost wages and can even provide death benefits.
Uninsured/Underinsured Motorists (UM/UIM)
Covers you financially in case the party who caused the auto accident has little or even no auto insurance coverage to compensate you fully.
Everyone should have a basic understanding of auto insurance coverage. It will help you understand which coverage you need and which ones you can do without. In the end, knowing about this will help you choose the right kind of auto insurance for you.