Auto insurance protects you and other drivers from loss due to vehicle-related mishaps. Insurance spreads financial risk among many people by setting up a shared pool of funds to pay claims cost. The best insurance policies are affordable and reward policyholders for safe driving.
Two main factors that determine what you pay for insurance:
Underwriting groups you with people of similar risk based on your characteristics. Some traits, such as geographic location, are basically beyond your control. Others, such as your driving experience, type of car, and amount of driving, can be controlled.
A rating is assigned based on what the insurer believes it will cost to assume financial responsibility for you. The higher the average losses in the group with characteristics similar to yours, the higher your rates will be.
Most auto policies provide the following coverage types:
Liability insurance protects you if you are liable for injury to others or damage to the property of others with your vehicle. It protects you in the event of a lawsuit arising out of the ownership of a covered automobile or the negligent operation of that auto. Because this coverage protects your assets, it’s important to have this coverage and keep the amount of coverage (limits) at a consistently high level. The two types of liability insurance include:
- Bodily Injury Liability – Protects you in the event you are determined to be responsible for an accident in which someone is hurt or killed.
- Property Damage Liability – Covers the damage your vehicle causes to someone else’s property, such as their car.
Covers court costs, legal expenses and attorney’s fees.
Pays for physical damage to your car resulting from a collision with an object, such as another car or a tree. The newer and more expensive your car, the more reason there is to purchase this insurance, since repairing or replacing a damaged car can represent a major expense. Typically, collision coverage is optional, but it may be required by some lending institutions.
Medical Payments Coverage
Unlike bodily injury liability coverage, this insurance takes care of medical expenses for you (as a pedestrian or as a driver) and/or passengers in your car. This insurance is required in some states, and payment is made regardless of who is at fault This is commonly called “no-fault” insurance — which doesn’t mean that you can’t be held responsible for an accident. Rather, it simply allows you to be compensated by your provider to the limits of your coverage, no matter who is at fault. In addition to covering your doctor and hospital bills, this insurance may also cover you for lost wages, funeral expenses and other essential costs.
Uninsured Motorists Coverage
Pays you benefits for injury or death caused by a hit-and-run driver or a driver with no insurance (whether you’re a driver or a pedestrian).
Underinsured Motorists Coverage
Pays benefits for injury or death caused by a driver who doesn’t have enough liability insurance to cover the losses.
Pays for most other damage to your car, including fire, vandalism, glass breakage, animal collision and theft. Although this insurance is also optional, it’s desirable because it protects you from expenses due to damage caused by unpredictable events. Comprehensive is generally less expensive than collision coverage.
Other Recommended Coverages
Include rental reimbursement coverage and towing and labor coverage. These are inexpensive and can be useful in the event of an accident or breakdown.
Contact Hill Insurance Agency to find out what coverage best fits your needs. Hill Insurance Agency tailors the coverage to fit your situation.