If you get into a car accident with an uninsured driver and the accident is the other driver’s fault, will your property damage coverage pay for the cost of repairs to your vehicle?  Unfortunately, the answer is no.  Property damage coverage protects you for damage that you may have caused to the vehicles or property of others.

In order for your vehicle repairs to be covered in the event the driver at fault is uninsured, you would need to have collision coverage on your auto insurance policy.  Collision insurance pays for damage to your car resulting from an automobile accident regardless of who was at fault.  If the other driver was at fault, your auto insurance company may try to recover the amount they paid for your damages from the other driver or his insurance company.  A standard collision automobile insurance policy will pay for any repairs up to the actual cash value of your car.

It is important to remember that this value can be significantly lower than the cost of replacing your vehicle or the cost of replacing your car loan balance.  If your car is financed or leased, you will need gap insurance to reimburse you for the difference between what you owe and what the car is worth.

Collision coverage usually also comes with an insurance deductible.  It’s the amount of money you pay toward repairs before your collision insurance kicks in.  The higher the deductible you’re willing to pay, the less the collision policy will cost.  Also, while collision insurance coverage is not required by law in any state, if you’re driving a car purchased from a dealership or financed through a lender, you may be required by the dealership or lender to carry collision insurance.

Uninsured coverage or underinsured coverage, also known as UM or UIM, provides coverage if an at-fault party either does not have insurance, or does not have enough insurance.  Simply put, your insurance company pays your medical bills and then would subrogate (or to act as a substitute) from the at fault party.  The definition of an uninsured/underinsured motorist, and corresponding coverage, is set by state laws.  You can check with your state’s department of insurance or with your auto insurance company to find out more.

NOTE: The purpose of this article is to provide general information on the law, which is subject to change. If you have a specific legal problem, you may want to consult your lawyer.  For any auto insurance related questions, you may wish to consult your insurance company or insurance agent.

This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein.  No warranty or appropriateness for a specific purpose is expressed or implied.

Emergency roadside service is exactly what its name implies. Although roadside service is recommended for everyone; it is especially crucial for those who do a lot of driving; especially in more remote areas. Depending on your provider it may be called something else such as roadside assistance or motor club, but they all serve the same purpose; to get you out of a jam.Depending on your provider, actual coverage may vary; but most plans include the cost to cover a flat tire, retrieving your keys from inside your vehicle, running out of gas, jumpstarting your vehicle, or towing your car to one of the nearest service stations. Some companies offer additional coverages such as an arrest bond for traffic related offenses or trip interruptions. Trip interruption coverage is becoming more common and it covers any unintended interruptions during your trip. These can include reimbursement for meals, lodging, a rental car and other related travel expenses. In order to receive these benefits you usually have to be more than a certain number of miles away form your home.

Under most emergency roadside service plans, your immediate family is covered as well. Usually this would include any spouse, children, siblings or parents. The coverage applies to the vehicle that is listed on the policy and generally is not transferrable.

Roadside Assistance is a very valuable coverage. It gives you piece of mind when taking your next road trip. All you have to do if you’re in a jam is call your service provider and explain the situation and wait for help. In most cases you can add this to your policy for just a few dollars a month. Check with your local agent to see the rates and coverages available to you.

This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein.  No warranty or appropriateness for a specific purpose is expressed or implied.

Do you need auto insurance if you have a learner’s permit?  This is a question that comes to mind for most young drivers and their parents.  The car that the permitted driver practices in (with a licensed adult) must be insured. 

This means that if a driver has a learner’s permit and will be learning on his or her parents’ car, it’s the parents’ insurance that will cover the driver during this time.

Whether the permitted driver is required to be a listed, rated driver on the insurance policy depends on the state and the insurance carrier. This should be verified with the insurance company.  For example, the parents of the permit driver may need to formally notify the insurance company that their son or daughter has a learner’s permit and will be driving the family car.  Most insurance companies do not charge extra during the learning process, but will begin charging when the student driver becomes a licensed driver.  Families should always contact their auto insurance carrier to make sure that all drivers are covered.

This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein.  No warranty or appropriateness for a specific purpose is expressed or implied.

Comprehensive and Collision coverage are the two most common types of coverage for your vehicle. These types of coverage are not mandated by the state but may be by your loan or leasing company. The only type of coverage mandated by the state is liability coverage. Liability covers any of the damage to others that you are at fault for, up to your policy limits.

Collision Coverage:

Collision coverage takes care of damage to your vehicle, resulting from a motor vehicle accident. This can be an accident between you and another vehicle or between your vehicle and fixed property. Your collision coverage is applicable regardless of who is at fault for the accident. If the accident is your fault, you will have to open a collision claim if you want your vehicle repaired by your insurance company. If the accident is not your fault, you have the option to open a collision claim if you want. Assuming the person at fault for the accident has a valid auto insurance policy; your damage can be covered under their policy as a property damage claim. However, if you want your company to take care of the damages, they can and will then get reimbursed from the adverse party’s company.

Comprehensive Coverage:

Comprehensive covers your vehicle from any damage not caused by a collision. Examples of when this type of coverage would apply are if your vehicle is stolen, if your vehicle catches on fire, if your vehicle sustains damage from wind, a hurricane or any other act of nature and other situations where there was no collision. Just like collision coverage, comprehensive coverage is not mandated by any state agency. Like collision coverage, it is required if there is a bank interest in your vehicle.

Deductibles:

A deductible is the amount of money you will be responsible for when filing a collision or comprehensive claim. Deductibles range from $0 to a couple thousand dollars. The higher your deductible is, the lower your premium will be. The most common deductible amount is $500. Make sure you select a deductible you can afford. If you file a claim, you will be responsible for your deductible before insurance starts paying out. For example, if you have a $1,200 repair and your deductible is $500, then you will be responsible for paying the first $500 of the repair and then your insurance policy will cover the remaining amount.

This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein.  No warranty or appropriateness for a specific purpose is expressed or implied.

The laws covering car insurance vary from state to state. However, there are many general laws that are followed by most. The most important is the requirement to have insurance. It is against the law to drive or own a motor vehicle that is not insured.

Insurance protects you from liabilities that may arise from a car accident. If you don’t have insurance, then you are liable for any damage that you may cause; and that can be very costly. In addition to the damages you may have to pay for, you will most likely get yourself into some legal trouble as well. In most cases, you will receive a ticket for driving without proof of insurance.

If you plan on financing a vehicle or leasing one, you won’t be able to do so without insurance. Since the bank holds an interest in the vehicle, they will not loan you the money if they are not protected from liabilities. The lenders will also most likely have minimum requirements of insurance coverage. Sometimes this may be more than your states minimum requirements.

Many carriers offer a “persistency” or renewal discount, which rewards you for maintaining continual insurance coverage.  If you allow your policy to lapse, you can lose eligibility for this discount and will pay a higher rate.

So if you’re caught without the minimum required insurance; be prepared to pay fines, possibly do some community service, pay higher rates and even pay for damages caused. It is never a good idea to not carry insurance, no mater what the reason. If you can’t afford car insurance there are other ways to get around. Try to take the bus, the train, walk or get a ride from a friend or co-worker.

This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein.  No warranty or appropriateness for a specific purpose is expressed or implied.

Leasing a car can be a headache in itself. There are many costs that the lessee may not really consider before leasing a vehicle. Such costs include early termination fees, extra mileage fees and wear and tear charges when you return your vehicle at the end of your lease. One kind of hidden cost is auto insurance.

When you lease a car, you do not own it. You are essentially renting it from the bank. Since the bank has the main interest in the vehicle, they require you to carry certain types of insurance to ensure they are protected. When you lease a car, more than likely you’ll be required to purchase liability and collision coverage. Collision coverage covers the damage to your own vehicle.  Most state laws require you to only carry liability insurance, but since you don’t own the car, the bank can raise these requirements.

Aside from being required to carry collision insurance, you may also be obligated to carry more than the state minimum limits. Many leasing companies will require you to carry bodily injury coverage with minimum limits of $100K per person and $300K per accident and property damage coverage of a minimum $50K. These limits are quite higher than the average state minimums of $25/$50K for bodily injury and $10K property damage limits.

Gap insurance is also important when leasing a car. Gap insurance will (with some limitations) pay the difference between what you owe on your vehicle and the actual amount it is worth, if your vehicle is deemed to be a total loss. Most cars depreciate quickly and if your vehicle has been declared a total loss and you owe more than it is worth, then you will be on the hook for the remaining amount. What this means is that you will have to still make payments on a car that no longer exists as well as payments for your replacement vehicle.

Remember, leasing a car also has many advantages. But before you jump into a new lease, plan out all the costs associated with it so there are no surprises.

This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein.  No warranty or appropriateness for a specific purpose is expressed or implied.

 If you are involved in an auto accident, there is a 1 in 7 chance the other person involved does not have car insurance. This number is actually getting higher. There is no red flag indicator as to why so many people are uninsured, but many believe it is a combination of the state of the economy and people’s belief that they don’t need it. The fact is that if you drive a car, you need it. There is a reason that this is a law in every state. It is to protect yourself and everyone else on the road.

Although state laws require all drivers to have auto insurance, there is not much enforcement on the matter. It is true that, in many states, when you register your vehicle with the Department of Motor Vehicles, you are required to provide proof of insurance. However, once that is completed, there is practically no enforcement thereafter. Except for states that maintain an electronic database, and carriers report cancelled policies, the only way for law enforcement to find out is if you are pulled over or involved in an auto accident.

This being said, it is very important for all drivers, (who carry auto insurance) to have uninsured motorist coverage as well as underinsured motorists coverage. Uninsured motorist coverage will cover bodily injury claims to you that would ordinarily be paid by the other party’s liability insurance.  You may also buy limited protection for your vehicle, or a deductible waiver if you have collision coverage.

In addition to uninsured motorist coverage, it is very important to carry underinsured motorist coverage. These two coverages are usually sold together. If you are “lucky” enough to be involved in an accident with someone who DOES have insurance coverage, there is a good chance they only carry the state minimums. In most states, this limit is $15,000. If you are in a serious accident, the costs add up very quickly. Your health insurance may cover your hospitalization costs if you are injured, but what about loss of income if you can’t work for an extended period of time?  Having underinsured motorist coverage gives you the extra protection you need to prevent any out of pocket expenses.

It would be nice if we lived in a perfect world where everyone carried the proper amount of insurance. As you can see, we are far from that. So to ensure you and your family are protected, it is essential to carry uninsured and underinsured motorist coverage.

This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein.  No warranty or appropriateness for a specific purpose is expressed or implied.

If you plan on taking a trip across the border to Mexico, make sure you have Mexican auto insurance coverage. Without proper coverage, travelers risk paying exorbitant fines and possibly jail time. Buying the right type of Mexican auto insurance can be difficult due to the differences between American and Mexican laws.

One common misconception that travelers have is that their U.S. auto insurance policy provides coverage for them in Mexico. That is not likely the case. If your auto insurance company is not licensed to do business in Mexico then they will not be recognized by the Mexican government and therefore cannot provide coverage for you.

If you drive a vehicle in Mexico, Mexican law requires you to have at least civil liability insurance issued by a Mexican Insurance company. This type of insurance will cover any damage which you cause to another person or vehicle up to your policy limits. There is also additional coverage that drivers can purchase which will cover their own vehicle as well.

In Mexico, if you do not have liability insurance and you are involved in an accident, it is very likely you will have to spend some time in jail. This is because you are guilty until proven innocent in Mexico. However, having Mexican Auto insurance will not guarantee to prevent you from jail time if the details of the accident are under investigation. Due to these types of laws, most Mexican auto insurance comes with some type of coverage for legal aid and bail money.

There are many companies in the U.S. which offer Mexican auto insurance in different forms. You can purchase a regular policy just like your U.S. auto insurance; or you can buy insurance for a certain amount of days. If you are just taking a trip for a short period of time, it is better just to get coverage for the amount of time you will be visiting.

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Every state has different laws when it comes to car insurance coverage. These laws lay out the minimum auto coverage motorists can purchase. Depending on the state, the minimums vary as well as the type of insurance. Although these are the state minimums; it is highly recommended that you buy as much insurance as possible. Some states require you to have just bodily injury and property damage coverage and some states require you to carry those two and others, such as Uninsured/Underinsured Motorist coverage and Personal Injury protection (PIP). You can find a list of state minimums here.

Whether you use an insurance agent or go direct to the insurance carrier; make sure to go over your state’s requirements. Another thing to keep in mind is that laws change all the time. Check back with your agent or carrier to make sure your coverage is up to date.

Auto insurance is designed to protect you from any liabilities arising from an auto accident, theft, vandalism, or Mother Nature. If possible, don’t just buy the minimum amount. If you are involved in an accident, costs can add up very quickly. Always purchase the maximum necessary in order to protect yourself. Your premiums may be higher but your level of security is greater as well.

But what happens if you are on vacation in a state where the minimums are different from your state? Will you be covered? These are very common questions and people get confused. In most cases, if you are involved in an out of state car accident; your insurance carrier is obligated to extend your minimum coverage to that of the state where the accident occurred. Many carriers also extend automatic coverage to rental cars, especially when used as a temporary substitute for your insured vehicle. However, limitations apply and not all carriers cover “pleasure rentals” or will just cover liability, so be sure and read your policy or check with your agent before renting a vehicle.

This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein.  No warranty or appropriateness for a specific purpose is expressed or implied.

There many types of auto insurance coverage to choose from. It is very important to understand the different types of coverage in order to make sure you are properly protected. The following is a list and brief description of the main types of auto insurance coverage available.

Collision Coverage:

This type of coverage refers to your own vehicle. If you are involved in an accident which is your fault; or the at-fault party is not identified, your collision coverage will cover the damage to your vehicle. Most types of collision coverage include some sort of deductible. Your deductible is the amount of money that you will have to pay before your insurance company will pay out. For example, if the damage to your vehicle is $750 and you have a $500 deductible; you will have to pay $500 and your insurance company will pay the remaining $250.

Comprehensive Coverage:

Comprehensive coverage applies to non-accident related vehicle claims. Comprehensive coverage covers theft, acts of God, vandalism, and damage by animals. Just like collision coverage, there is a deductible attached to this type of coverage as well.

Property Damage:

Property damage coverage applies if you are at fault for an accident. Your property damage will cover the damage to any property resulting from an accident for which you are at fault for. This could be the damage to another vehicle or a fixed piece of property like a guard rail. Limits of property damage range from $5K to millions of dollars. It is very important to have enough PD coverage. If you have $5K PD limits and you t-bone a Bentley, you’re going to be on the hook for a hefty bill.

Bodily Injury Liability:

This type of coverage applies to any harm or death caused to a person; resulting from an accident you are at fault for. Aside from injuries, it also protects you from any lawsuits resulting from the injuries. Bodily injury liability will cover medical bills, loss of income, and pain and suffering. Make sure you have sufficient coverage to prevent anyone from coming after your personal assets.

Uninsured Motorist:

This coverage protects you in the event you are involved in an accident with an uninsured, at-fault motorist.  It consists of Uninsured Motorist Bodily Injury and Uninsured Motorist Property Damage coverages, which take the place of the equivalent liability coverages of the uninsured motorist.  Given the high rate of uninsured drivers, especially in urban areas, this coverage is a must to ensure complete protection.

This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein.  No warranty or appropriateness for a specific purpose is expressed or implied.