Key Terms To Understand About Your Auto Insurance Coverage
Buying auto insurance coverage can be confusing. If you don't make the right choices, you can find yourself in a giant financial hole if an accident occurs. That is why you need to understand a few key terms about your auto insurance so you can make better-informed choices about your coverage needs. This will help.
Deductible
This term refers to the amount you are expected to pay out of pocket when covered events occur. Most insurance providers offer options for deductible amounts. Choosing a higher deductible can lower your insurance premiums. However, it also increases your share of the financial burden if an accident occurs. Choose carefully with your budget in mind.
Medical Payments
This coverage protects the people in your vehicle, regardless of who is at fault in the accident, from the costs of medical care and rehab after an accident. Of course, this coverage is up to the policy limits. This coverage is optional in most states. If you do not have this protection, you must rely on your personal medical insurance and that of your passengers to cover these costs or pay out of pocket.
Uninsured/Underinsured Motorist Coverage
Despite laws requiring auto insurance in almost every state, there are those who drive around without it – or who have too little coverage to fully cover the damage to you, your passengers, or your vehicle. This valuable insurance protection bridges the gap so you can get the necessary repairs to your vehicle and medical care following an accident.
Personal Injury Protection
Offers protection for medical costs, lost wages, funeral costs (if necessary), and other costs for essential services after an accident. It is commonly used in states that have adopted a "no-fault" system for dealing with accidents and injuries.
Auto Liability Insurance
This auto insurance coverage is essential if you are legally responsible for an accident. This insurance protection means that your insurance company will pay, instead of you paying out of pocket, to cover property damage, auto repairs, and medical bills of the third-party individuals injured in the accident. It does not provide protection for injuries to people in your vehicle or repairs to your vehicle. Plus, liability insurance only provides protection up to the stated limit of your policy. Damages beyond that will come out of your pocket.
The better you understand these key auto insurance coverage terms, the more likely it is that you will buy the right insurance for your needs and your risk tolerance. Working with a trusted insurance agent can help ensure that you get the right auto insurance coverage to meet all your needs.
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