According to the National Highway Traffic Safety Administration, there were more than 6 million reported car crashes in 2007. Multi-ton vehicles traveling at high speeds, congested traffic and distracted or impaired drivers all too often lead to accidents that can cause significant bodily and financial harm. Therefore, it's crucial to understand and take advantage of auto insurance policies to protect not only yourself, but also everyone else on the road.
By law, you must have car insurance if you want to drive on the road. Without it, you run the risk being fined, losing your license, and being arrested or sued depending on the seriousness of the accident you caused. Even just being pulled for a minor infraction and not having proof of insurance can lead to being fined. Even for the best drivers, having insurance will save you money in the long run.
Perhaps the most compelling reason to have auto insurance is simply the fact that all states require at least basic liability coverage in order to legally drive. The amount of required coverage varies from state to state, but the goal is that every driver carries enough insurance to cover the medical bills and property damage they might cause while behind the wheel. In addition, financial institutions often require a minimum level of insurance for cars that are being financed or leased, in order to protect their investment.
This coverage generally pays you and your household members for expenses related to medical payments, lost wages, funeral expenses, etc. that occur as a result of an accident. This is the most basic aspect of auto insurance and is required for coverage in the state of Florida.
Liability insurance is typically divided into two categories, bodily injury and property damage. Property damage pays for the physical damage to other people’s property that was caused by your vehicle. It covers the cost for the replacement or repair of the vehicles and other property damaged in an accident. Bodily injury pays for the damage your vehicle causes to the actual people involved, including injuries requiring medical treatment, lost wages, funeral expenses, etc. Bodily injury coverage pays for the medical bills of anyone injured by a covered driver, with maximum amounts defined per person and per accident. Note that these basic liability policies only pay for damage and harm to others; if someone with basic liability coverage only causes an accident, they might find themselves paying their own repair and medical bills. In addition, many states require underinsured motorist coverage, which is designed to protect you if you're in an accident caused by a motorist without liability coverage of their own.
In addition to basic liability insurance, many drivers opt for collision insurance. Collision insurance covers your vehicle, regardless of who is at fault, in an accident with another vehicle. This coverage can come in handy because if an accident occurs under uncertain circumstances with no impartial witnesses, there might not be any way to determine who caused the accident. If you are determined to be at fault, collision insurance still will cover the repairs to your vehicle.
A final option for auto insurance is comprehensive coverage, which covers damage to your vehicle caused by anything other than a traffic accident. Vandalism and accidental damage from non-motorists or natural causes such as hail fall under this category. Comprehensive insurance can be a fairly expensive option, however, and many motorists with older cars pass up this type of policy.
Medical Another policy option that many drivers opt for is medical coverage. Adding medical coverage ensures that doctor and hospital bills will be paid if you're in an accident. As with collision coverage, this policy pays out regardless of fault, so some level of coverage can be a valuable protection for yourself and your passengers, no matter the circumstances of the accident.
Generally pays for damage to your vehicle or passengers caused by uninsured or underinsured drivers.