Automobile Insurance Personal Finance

Auto Insurance – Several Different Coverages Wrapped into One Liability Coverage Pays for damage to others and their property when you are at fault Pays up to a limit Three numbers: Such as 100/300/50 First number is coverage per injured person (in thousands) Second number is maximum coverage for all injured persons per accident Third number is coverage for property damage Example: You are at fault in an accident involving four other people and their car The above coverages mean your insurance company will pay a maximum of $100,000 per person, but only a maximum of $300,000 for the four people combined. It will also pay a maximum of $50,000 for their car

Auto Insurance – Liability Coverage Each state has minimum liability coverages In Louisiana, the minimums are 15/30/25 If you are liable for more than your insurance covers, you are on your own Liability coverage does not cover injuries to you or your car

Uninsured Motorist Coverage Pays for damage to you and your car if the other person is at fault and they don’t have enough insurance Your company will pay up to a limit Example is 100/300/50

Collision Coverage – Legally Optional Pays for damage to your car that came as a result of a collision when you were at fault If someone else was at fault, it should be covered under their required liability insurance Pays to fix the damage to your car Your car is “totaled” if it costs more to fix your car than it is worth In that case, it pays the market value of your car Any payments come after your deductible You are not required to actually get your car fixed

Comprehensive Coverage - Optional Pays for damage to your car caused by anything other than a collision Theft Vandalism Flooding Pays to fix the damage or the market value of your car Whichever is less After any deductible

Medical Payments to Others Pays for medical costs of those in your car – including you Your insurance company will seek to get this money back if another car was at fault Your car insurance company should pay before your medical insurance

Suggestions If you anticipate making a comprehensive or collision claim less frequently than once every five years, set the deductibles as high as you feel comfortable with Keep your liability and uninsured motorist coverages high – or get an umbrella policy Don’t pay for the extra insurance when you rent a car. Your insurance will cover it. Anytime you let someone else drive your car, the insurance company treats it the same as if you were driving it, so make sure they will drive safely because your rates will go up if they cause an accident.