Insurance Matters
Auto Insurance
Made Easy
(NAPS)—Understanding insurance can often be like trying to learn a foreign language. Many find it confusing and intimidating.
Fortunately, there’s help. Here is a quick reference designed to help you understand some of the most common kinds of coverages.
Liability covers bodily injury and property damage (BI/PD).
This covers your legal liability, up to the dollar limits
you select, for damages caused to others in a covered vehicle
accident. In most states today, liability insurance is
mandatory.
Under BI/PD, your insurance company pays for damages to
an injured person and for property damage that you are
legally obligated to pay as a result of an accident. If
your policy covers you in the event you’re
sued after an accident, your insurance company will pay for a lawyer to
defend you.
Liability limits generally appear as three numbers, for
example, 25/50/25 or 100/300/100. The first number refers
to the maximum amount, in thousands, that your insurance
company is obligated to pay for bodily injury per person.
The second number is the maximum that would be paid out for bodily
injury per claim and the third number represents the maximum
amount your insurance company is obligated to pay for property
damage you cause.
Collision. When you buy collision coverage,
your insurance company pays for damages if your vehicle
collides with another vehicle or object. Collision coverage
involves a deductible amount you select when you purchase
your policy. This amount is what you are required to
pay before your insurance company starts picking up the
tab. Remember, the deductible amount is the amount you
need to pay in the event of a claim.
Comprehensive covers damage caused by events other than a car collision—such as fire, theft, vandalism, hail or flood. It also covers damage caused by your vehicle colliding with an animal. And if your car is stolen, it will cover the cost of a rental, subject to a daily limit. Like collision coverage, a deductible usually applies.
Medical Coverage. Depending on the state in which you
live, you may have available to you Medical Payments coverage
or Personal Injury Protection (PIP) coverage. While these
both work differently, they provide coverage for medical
care provided to you as a result of a car accident.
Davison Insurance Agency, LLC can help you determine the
price, coverage and service that best meets your needs.
