There are several different categories of auto insurance and each covers a different aspect of your risk as a driver.
- Liability: If you are deemed at fault in a car accident, liability coverage will pay for repairs, medical costs for injuries suffered by others in the vehicle, plus other expenses related to the accident such as legal fees. You liability limits are set at the time you purchase your policy. There are two parts to liability coverage: Bodily injury liability and property damage liability. The limits are the maximum amount the policy will pay out; anything above would come out of your pocket unless you have other insurance (such as an umbrella policy).
- Collision: If you hit another vehicle or an object (like a guardrail), your collision coverage will pay for damages or repairs to your vehicle after you pay a deductible (up-front amount). In other words, if you have collision coverage with a $500 deductible and you suffer damage that costs $1,500, your collision coverage will pay $1000 after you pay the first $500.
- Comprehensive: Comprehensive coverage, which is also known as “other than collision,” pays for losses to your vehicle if it suffers damage from something other than an accident. For example, if a tree falls on your car or you hit a deer while driving, some portion of that loss will be covered if you have comprehensive coverage. Like collision, comprehensive has a deductible attached to it.
- Medical Expenses: This coverage pays for injuries that you, a family member or anyone else riding in your vehicle may suffer in an auto accident, regardless of who is at fault. It also pays for injuries you or your family members may incur while riding in other vehicles.
- Uninsured/Underinsured Motorist: This coverage pays for injuries and property damage you suffer in an accident when the driver at fault is uninsured or does not have enough insurance to cover your injuries and damage. It will also cover you in the event that a hit-and-run driver flees the scene and you cannot file a claim against that driver’s insurance company.
- Roadside Assistance: Many insurance companies offer this optional coverage. If you need a tow or service for a flat tire or dead battery, roadside assistance will provide that service for a nominal premium.
- Rental Reimbursement: If your car is in the shop for several days and you need a vehicle, this coverage will provide that for you for a nominal premium.
When you get behind the wheel, you take a risk. You may attempt to be the best possible driver, but you also have to trust that everyone else on the road is driving well and paying attention, too. Auto insurance provides a safety net when drivers make mistakes.
In the event of an accident, you are at risk financially. If the accident is not your fault, and the other driver does not have adequate insurance, you have to pay for all damages to your own car plus pay for any medical bills if you are badly injured.
When you are at fault, you are typically liable for damages to the other person’s vehicle as well as the medical costs of injured victims. Additionally, you must cover the repairs to your own vehicle and the costs of legal fees if you are sued. All of your assets are at risk if you are uninsured or underinsured.
Your vehicle just might be the most expensive possession you have other than your home. However, your auto insurance won’t necessarily be costly. While rates vary from state to state and take into account a variety of factors, car insurance is usually fairly affordable. The factors that affect your costs include whether your car is new or used, the overall safety rating of the car, your driving record, your age and gender, and even your ZIP code, as certain areas tend to have a higher occurrence of accidents and claims than others.
The discounts you may qualify for include:
- Good Student Discount: May apply if the young driver in your family has good grades
- Good Driver Discount: May apply if you’ve been accident-free for a period of time
- Multi-car Discount: May apply if you insure more than one of your vehicles with the same company
- Multi-policy discount: May apply when you insure both your home and car with the same company
Speak to an Agent at American Heritage about these discounts and we can determine the ones that would benefit you and save you the most money on your policy.