Choosing auto insurance that fits your needs and the needs of your family is important, so get to know the basics. Here you'll find information about auto insurance and answers to some common questions. If after reviewing this material, you still have questions, please feel free to contact us!
Auto insurance is meant to protect you if you cause injuries to others or damage their property in an auto accident. It can also provide protection if your car is damaged in an accident or is stolen. What protection you have is spelled out in your auto insurance policy. An auto insurance policy is a contract between you and an insurance company. You, the customer, pay a certain amount ("premium") to the insurance company in exchange for a set of coverages you selected. Your policy sets forth what the insurance company will or will not cover.
At a high level, auto insurance typically provides four basic things:
There are a variety of coverage options available; they may vary by state and company.
Below are some simplified descriptions of common auto insurance coverages.
All coverages are subject to the limits, terms and conditions of the actual policy you purchase.
Generally pays damages for bodily injuries to the driver and passengers of the other vehicle when you are responsible for an accident. It also provides coverage to defend you if you are sued because of an auto accident.
Generally pays for damages to another person's property (e.g. their car) when you are responsible for an accident. It also provides coverage to defend you if you are sued because of an auto accident.
Generally covers you, household relatives and your passengers for medical expenses that result from injuries sustained in an auto accident. It also covers you as a pedestrian if you are hit by a vehicle.
Some states have personal injury protection (PIP) in place of, or in addition to, medical payments coverage. This is also known as no-fault coverage. PIP can generally pay for medical expenses, funeral expenses, loss of income and other expenses for injuries or death due to bodily injury sustained as the result of a car accident.
Generally pays for damages for bodily injury to you and your passengers when caused by another in an auto accident and the person legally responsible either has inadequate or no insurance. This coverage varies greatly by state. In some states it may be a combined coverage, while other states may offer it as two separate coverages (e.g. one for uninsured motorists and one for underinsured motorists).
Generally pays for damage to your car if it hits another car, object, or overturns. A deductible applies to this coverage.
Generally pays for damage to your car if it is stolen or damaged by certain causes other than collision, such as fire, theft, hail or vandalism. A deductible applies to this coverage.
When purchasing auto insurance, make sure you find coverage that fits your needs. Think about you and your family's specific circumstances, including your risk tolerance and your budget. If you aren't sure what type of things you should consider, read below. Or, get help by working with an insurance agent or by calling an insurance company directly. Below are a few simple questions to help you start evaluating your needs.
An auto policy generally consists of three main parts, which together, form your auto policy:
It is important to read your declaration page, base policy and any applicable endorsements together, as they collectively form your insurance policy.
Note: auto ID cards, which generally arrive with your policy, do not actually form part of the policy. Rather, they provide a convenient way to show that you have insurance. They contain some basic details about your policy, such as your policy number, policy effective date and the specific vehicle insured. Some states require that you keep these in your car as proof of insurance.