What Are The Types Of Car Insurance And What Do They Cover?
Only after an injury accident happens is the time that many people take the time to look at their insurance paperwork. Right now, you need to know what coverage covers what costs.
Once the dust clears after an auto accident, you may ask your self:
How does car insurance work when you get into an accident?
Read on to learn more.
What Is Liability Insurance?
If you cause an accident, liability insurance covers the damages to another person and their car.
Liability insurance has two parts: bodily injury and property damage.
Bodily Injury Liability: covers the other person's medical bills and other damages.
Property Damage Liability: covers the damage you caused to the other person's vehicle and property.
In California, the minimum liability coverages are:
Bodily Injury Liability: $15,000 per person/$30,000 per accident
Property Damage Liability: $5,000
These limits are way too low to cover many claims. This insufficient coverage leave many people without enough insurance to protect them in the event of an accident. What this means is you may be in danger of having to pay out of pocket if your insurance does not cover all the losses of the other person.
What's The Difference Between Full Coverage And Liability?
A lot of people think they have “full coverage”, but don't really know what that means.
Did you know that there is actually no such insurance called “full coverage”?
“Full coverage” is actually a combination of three types of insurance coverages: bodily injury liability, property damage liability comprehensive coverage and collision coverage
What's The Difference Between Collision and Comprehensive?
Collision coverage can pay to repair or replace your vehicle, if the damage was caused by an accident. You have to pay the deductible.
Just like the liability property damage coverage that covers the other car (the $5,000 minimum above), collision insurance will cover your car. But, the problem is you may not have enough collision coverage to repair or replace your car because it's expensive.
Comprehensive insurance covers things other than accidents. For example, if your car gets stolen, vandalized, or car catches fire, comprehensive insurance covers those things. You have to pay a deductible before getting paid under comprehensive insurance.
What Is Uninsured Motorist Coverage And How Does It Work?
Did you know that almost 1 in 7 California drivers are uninsured? This means they're driving around without car insurance. And a lot of people drive around with just a minimum liability policy. It's often not enough insurance to cover when someone gets hurt.
This is why you really need uninsured motorist coverage. This insurance can your injuries, and your damaged or total loss car, if the other person has no car insurance.
Underinsured insurance makes up the difference between the underinsured motorist and your uninsured motorist policy. A simple example is if the guy that hit you has a minimum policy, the most you can get is $15,000. But if you have uninsured motorist coverage of $30,000, that $15,000 gets bumped up to $15,000, which is the difference between $30,000 and $15,000.
Uninsured motorist insurance policies are very picky and have certain requirements in order for you to qualify to use this coverage after an accident.
Here are a few more coverages that may appear on your insurance paperwork:
What Is Med Pay And How Does It Work?
"Med Pay" is short for Medical Payments.
No matter who was at fault in an accident, your medical payments coverage can pay the medical expenses of whomever is in your car. If you collect from someone else, like the person that hit you, most likely your car insurance will make you pay back whatever they paid out under your med pay insurance.
What Is Rental Car Coverage And How Does It Work?
Rental car coverage may pay for your rental car while your car is being repaired.
But, watch out for two things:
First, rental car coverage does not cover the insurance that the rental cars sell you when you rent a car.
Second, rental coverage only covers a certain number of days at a certain daily rental rate.
When it comes to rental car coverage, anything that's not covered has to be paid out of your own pocket.
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