Auto Insurance

A. What is auto insurance? Protection against financial loss if you have an accident involving a vehicle Legally liable – to be at fault for an accident If you don’t carry insurance to cover accidents that you cause – people can and will sue you for personal belongings & assets

B. Six Types of Coverages Bodily injury liability Property damage liability Medical payments (also called Personal Injury Protection or PIP) Collision Comprehensive Uninsured/underinsured motorist coverage

1. Bodily injury liability Covers medical injuries that you cause to someone else Does not cover your medical injuries

2. Property damage liability Covers damages that you cause to someone’s personal property Includes other vehicles, lamp posts, telephone poles, fences, landscaping, buildings, etc. Does not cover your vehicle’s damages

3. Medical payments (Personal Injury Protection or PIP) Covers treatment of medical injuries to you, the driver and passengers of the car (regardless of who is at fault) Medical payments Lost wages Funeral costs If in an accident with someone & it is their fault – their bodily injury liability should cover your medical injuries before your PIP kicks in Covers as pedestrian if struck by a car on a public road

4. Collision Covers damages to your car resulting from: a collision with another car or object (except animals) flipping over potholes Usually contains a deductible which is per accident Your fault – insurance will pay minus your deductible Someone else’s fault – their property damage liability should cover your vehicle’s damages

5. Comprehensive Covers loss to your vehicle due to theft Covers damages to your vehicle caused by other than a collision, such as: Hail, fire, earthquake, explosion, contact with animals, windstorm, vandalism, etc. Usually contains a deductible which is per accident May also cover when windshield is cracked or shattered

6. Uninsured/Underinsured Uninsured: covers your medical injuries when you (or a member of family or driver with permission) if hit by an uninsured or hit-and-run driver (not your fault) Underinsured: covers your medical injuries when at-fault driver does not have enough insurance to pay for losses; also covers you when you are hit as a pedestrian Only covers medical injuries not damages to vehicle

Full coverage (all 6 types) Bodily injury liability Property damage liability Medical payments or PIP Collision Comprehensive Uninsured/underinsured

Liability coverage Bodily injury liability Property damage liability

C. Can you legally drive without insurance in the state of Iowa? NO! Most states require drivers to have minimal amounts of liability insurance When you purchase a car with a bank loan – most will require you to have full coverage

Liability insurance: expressed as three numbers in thousands Iowa’s minimum - 20/40/15 1st number: bodily coverage of 1 person per accident 2nd number: bodily coverage of more than 1 person per accident 3rd number: property damage of accident per accident