There are hundreds of insurance companies that advertise great rates for Car Insurance. Amid all of the offers of great savings, Friedle Insurance Agency won’t let the protection for your family take a backseat.
A Car Insurance policy is designed to provide you with a level of protection against property, liability, and medical costs if you are involved in an accident.
- Property coverage pays for the damage of or the theft of your car.
- Liability coverage pays for your legal responsibility to others for bodily injury or property damage.
- Medical coverage pays for the cost of treating injuries, rehabilitation and, sometimes, lost wages and/or funeral expenses.
All About Automobile Policy Coverage
BI? UM? PIP? If you’re trying to make sense of your automobile policy coverage options and the limits that you need, we can help. The basics are covered below, and provide the information you need (including the acronyms!) to understand your Automobile Insurance coverage options and policy.
Comprehensive and collision
Collision – Covers damage to your car when your car hits, or is hit by, another vehicle or other object. Less the deductible you choose, Collision Insurance pays to repair your vehicle. For older cars, you may want to consider dropping this coverage, since it is typically limited to the cash value of your car. Collision coverage is not required by a state, but if you have a loan or a lease, then the lien holder will require it.
Comprehensive (Other Than Collision or OTC) – For losses resulting from incidents other than collision, Comprehensive Insurance covers your vehicle, and sometimes other vehicles you may be driving. This coverage includes damage to your car if it is stolen or damaged by flood, fire, falling objects, or animals. States do not require that you purchase collision or comprehensive coverage, but, if you have a car loan, your lender may insist that you carry it until your loan is paid off.
Selecting comprehensive and collision deductibles
Collision coverage is generally sold with a deductible of $250 to $1,000, while comprehensive insurance is usually sold with a $250 deductible. By opting for a higher deductible, you’ll be lowering your auto insurance premium – and it’s just one method for doing so. Remember, the higher the deductible, the more you’ll pay out of pocket in case of a claim. To decide on a deductible that’s right for you, consider your available cash, disposable income, the value of your vehicle, and your tolerance for risk.
Bodily Injury Liability (BI) – This covers injuries that you, as the designated driver or policyholder, cause to someone else. Claims for bodily injury may include medical bills, loss of income, or pain and suffering. However, this insurance does NOT cover the cost of damage to your vehicle. It also does not cover the cost of damage to you or other people on your policy. Bodily Injury Liability is mandatory in most states.
Property Damage Liability (PD) – Covers you or someone driving the car with your permission if the car damages someone else’s property. Typically, the property is another vehicle. However, in some instance Property Damage Liability covers damages to items such as a fence, telephone pole, a house, etc. It also provides you with legal defense if another party files a lawsuit against you.
Medical Payments (MP) or Personal Injury Protection (PIP) – This no-fault coverage provides medical expenses to you and your passengers injured in an accident. Medical payments may also cover policyholders and their family members when they are injured either a) while riding in someone else’s car or b) when they are hit by a car while on foot or bicycling. If you and your regular passengers already have health insurance that covers similar expenses, this insurance, medical payments coverage, may be unnecessary. To be certain, you should check your health insurance policy for details.
Uninsured and Underinsured Motorist Coverage (UM or UIM) – UM or UIM coverage will reimburse you, a member of your family, or a designated driver if one of you is hit by an uninsured or hit-and-run driver. Underinsured Motorist coverage comes into play when an at-fault driver has insufficient insurance to pay for your total loss. Secondly, this coverage will protect you if you are hit by a car, truck, or motorcycle as a pedestrian.
Selecting liability limits
Most states require car owners to purchase a minimum of bodily injury and property damage liability insurance. In the event of a serious accident, you want enough insurance to cover a judgment against you in a lawsuit without the risk of jeopardizing your personal assets, such as your home and savings. By purchasing liability limits to account for both your current assets and future net worth, you’ll be protecting yourself against this risk. Friedle Insurance Agency will help you select limits that meet your unique needs.
What are the top ways you can save on your premium?
- Consider raising your deductible
- Keep up your good driving record
- Drive less to qualify for a low-mileage discount
- Drive a car with safety features such as anti-lock brakes, airbags, etc.
- Install an anti-theft device
- Ask about the Friedle Insurance Agency multi-policy discounts