Because auto insurance is a legal requirement to get behind the wheel of a car, many people look at it as something of a necessary evil. They pay for it begrudgingly with the hope that they never need to use it and, as a result, are left confused when a situation does arise where they need to file a claim.
In truth, car insurance is incredibly helpful for not only making sure that you get the compensation you’re entitled to in the event of an accident to make necessary repairs to your car, but also to make sure that things like medical bills are paid.
The Components of Automobile Insurance
A single automobile insurance policy is typically broken down into a few different categories depending on exactly what type of need it is designed to meet.
- Property Damage Coverage are funds set aside specifically to help pay for damage either caused to your personal property or someone else’s in the event of an accident.
- Medical payments coverage is designed to help take care of any and all medical bills associated with an accident, either in terms of the driver of the car or any passengers in either vehicle.
- Uninsured or underinsured motorist coverage is intended to provide you financial relief in the event that the person who hits you does not have automobile insurance to cover your injuries and losses or even no insurance at all.
Other important coverage options include repair provision coverage, which takes replacement costs into consideration without deducting depreciation from the amount of money you’ll receive, and new car replacement coverage, which is specifically designed to help replace a car that has been totaled in an accident with an equivalent make and model.
Mandatory Liability Car Insurance
Liability car insurance is one of the most basic forms of auto insurance coverage and it’s one of the few options that’s mandatory by law in every state. There are two types of liability insurance to consider. Property damage liability helps pay for damages to another individual’s property while bodily injury liability helps to pay for another individual’s personal injuries. California law only requires ordinary motorists to carry $15,000 in liability cover. This amount is often grossly inadequate to cover injuries sustained in even minor injury accidents. Because many people in California only carry the legally-mandated minimum amount, it is wise to plan for this in advance with higher levels of uninsured or uninsured motorist coverage.
Liability insurance covers the property damage and personal injuries related to other individuals in accidents you’re responsible for. However, liability insurance won’t cover damages to your vehicle or injuries you sustain. For complete insurance coverage, additional coverage packages would need to be added.
How To Ensure Complete Auto Accident Coverage
In reality, there is no such thing full coverage, but you can add packages to your coverage to enhance your protection.
- Comprehensive Coverage: Comprehensive coverage protects your car against damages sustained by events not related to a collision. Events could include vandalism, theft, falling objects, animal related damages, natural disasters, and storms.
- Collision Coverage: Collision coverage will help to cover damages to your vehicle in the event of an accident.
- Medical Payments Coverage: Medical payments coverage will help alleviate various medical expenses from injuries caused by auto related accidents.
- Underinsured / Uninsured Motorist Coverage: As it’s commonly acronymed, UM or UIM coverage is an additional bodily injury coverage in the event another driver who causes you harm has an insufficient amount of insurance coverage to pay for your damages. Surprisingly, it is often one of the least expensive types of coverage you can purchase. Though, the limits of UM/UIM coverage often must at least match the bodily injury coverage you purchase. This type of coverage may only be accessed upon exhaustion of the other driver’s liability insurance coverage.
Mixing and matching these coverage options will allow you to build an auto insurance package that meets your needs. Combining all of these options will give you the most complete coverage possible.
GAP coverage is a very important component of automobile insurance policies, though many people don’t understand exactly what it is. Let’s say that your car is currently valued at $10,000 and you get into a car accident through no fault of your own that ends in a total loss. However, you still owe $13,000 on your original vehicle loan.
Without adequate GAP coverage, you would get a check for $10,000 from your insurance company and you would be responsible for the remaining $3,000. With the right GAP coverage, you would get a check for the entire $13,000 and wouldn’t have to worry about those remaining payments.
Your California Insurance Company Lawyer
If you or a loved one is situated in the San Luis Obispo area and have additional questions about auto insurance, or if you’ve been injured in an automobile accident contact the Law Office of Daniel J. O’Neill today for a free consultation.