What Is Auto Insurance?
This flexible coverage can limit your out-of-pocket financial liability in several ways. Benefits can be paid to repair or replace your car if it is damaged, destroyed or stolen. It can also pay for damage to other vehicles and property for which you are liable. Finally, it can help cover medical bills and injury settlement costs resulting from an accident. When a covered incident takes place, the insurer pays the amount beyond the deductible you have selected, up to the policy limit.
Who Needs Auto Insurance?
You may if you own a car. Here's why:
- In many states, it is illegal to drive a vehicle without proof of insurance.
- Every year, nearly 24 million cars (almost one in ten) are involved in accidents, with property damage totaling more than $200 billion.1 Even a fender bender can easily cost a thousand dollars or more. Additionally, every year, 1,500,000 autos are stolen.2 Those that are recovered (and many are not) are often damaged. Without insurance, you would have to shoulder these expenses yourself.
- If you are at fault in an accident in which someone is injured -- either a passenger in your car, a pedestrian, or an occupant in another car -- your potential liability can be financially devastating. Your car insurance can help reduce that risk.
How Does It Work?
Auto insurance provides protection for you and your vehicle, as well as for damage and injuries for which you are responsible if you are involved in an accident with another vehicle, pedestrian or property. You can typically select a deductible that ranges from $250 to $1,000. Rates are based on coverage purchased, the auto insured, and the driving record of the owner and other drivers.
Most policies provide four types of coverages:
- Liability: Provides benefits for damages for bodily injury or property damage to another person or property.
- Medical payments: Pays medical bills for accident-related injuries to you and your passengers.
- Uninsured motorist coverage: Pays your medical bills if you are involved in an accident with an uninsured driver who is at fault.
- Coverage for damage to your auto: May include (A) collision coverage, which pays to repair your vehicle in the event of the overturn of the vehicle or its impact with another vehicle or object; and (B) comprehensive coverage applies to all causes of accidental loss except for collision (fire, theft, hail damage, windshield damage, etc.).
In addition, Personal Injury Protection (PIP) is required in certain "no-fault" states to pay medical bills, lost wages, and funeral expenses.
Auto Insurance In Action: One Example
Nicky loved her new Mustang. So, she was heartbroken when she hit a patch of ice last winter and slid into a utility pole. Thanks to her seat belt and airbag, Nicky was uninjured. However, the car sustained extensive damage, which was covered by her collision coverage. Six weeks later, she was back on the road in her repaired car. All she needed to pay was her deductible.
Where can I get more information?
Call one of our licensed agents at 801-223-3200 for a free quote. Or email us your contact information below and one of our agents will contact you.