Generally speaking, there are 4 parts to an auto insurance policy. It is a good practice to review and understand your coverages, so you know what you can count on if an accident were to happen.
- Liability to others
- Protection from others who are NOT insured or sufficiently insured
- Protection for your car
- Additional coverages
Part 1: Liability (to others)
This protects your assets when you are legally responsible for injuries and damages caused in an accident. Liability is divided into two coverages.
1.- Bodily Injury Liability -medical costs, loss of income, funeral expenses of other people.
2.- Property Damage Liability -repair or replacement of other driver’s car and damage to structures.
This is the required coverage to meet the financial responsibility laws in most states. The limits (the amount the insurance company has agreed to pay) vary per state.
Part 2: Protection from drivers who are uninsured or under-insured
There more uninsured drivers that we tend to think. According to the National Association of Insurance Commissioners‘ website, nearly 13% of motorists, or about one in eight drivers, were uninsured in 2014.
Uninsured and Under-insured coverage is divided into two sections:
1.- Bodily Injury -covers injuries or death of passengers in your car (including you).
2.- Property Damage -covers repairs or replacement of your car, if other driver has insufficient coverage.
Part 3: Damage to your car
If you own your car outright, this coverage is not required. However, you would be responsible for repairing or replacing your car if it is damaged in an accident.
Coverage for your car is divided into 2 parts:
Collision: covers your car hitting another car or structure, or another car hitting you. Hitting an animal is covered under comprehensive.
Comprehensive: cover damage to your car by anything other than collision. Covers theft, fire, vandalism, windstorm or hitting an animal.
Part 4: Additional coverages
These auto insurance coverages are secondary and cannot be bought without the primary coverages. Most policies offer them and can include:
- Medical Payments -medical or funeral expenses for you and/or your passengers
- Towing and Labor Costs -reimburses you for towing and basic roadside assistance
- Rental Reimbursement -Reimburses you for car rentals while your car is in the shop due to a covered accident.
- Sound System and Custom Equipment -protects your custom equipment you have installed in your car.
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We serve TX