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Auto Insurance Coverages
Your personal auto insurance policy contains auto insurance coverages. These coverages are designed to insure private passenger vehicles and their occupants against many perils. That's a lot of insurance jargon, let's make this simple.
Often times, people say that they have "full coverage." Full coverage means different things to different people. For example, it might mean that you have all the coverages that you can possible buy to insure your car. Or, it might mean, that you have high liability coverage, but not necessarily all the available insurance coverages. We'll point out all the available automobile
coverages to you and tell you what they mean.
All auto policies have "liability and property damage" coverages. This is the minimum amount of coverage that you can possibly buy to insure your car. In other words, these are the basic coverages required by law. The minimum amount of liability and property damage coverage required by California State Law is 15/30/5. This means $15,000 per person / $30,000 per accident / $5,000 for property damage. However, it's strongly recommended that you
purchase as much coverage as you can afford. If you're a homeowner, you need to consider higher liability limits such as 100/300/100. If you get into an accident in which you're at fault and the amount of the accident exceeds your policy limits, it is possible for the other party to go after any assets that you may have in order for them to satify their claim against you.
There's no point in losing your home if you can protect it with higher liability limits.
So what is liability insurance? "Liability" coverage pays others for any bodily injury damages you cause to another party. So, if you get into an accident and the people in the other car are injured, your liability will pay for their injuries; not yours or your passengers. That's covered under another coverage.
"Property Damage" coverage pays for damages that you cause to someone else's property. Say that you rear end the car in front of you, then your property damage coverage will pay to repair the other person's car. Also, if you hit a street light, then this coverage would pay for the repairs or replacement of a new street light. It's always best not to hit anything while driving your car; especially people. We understand that accidents happen. Keep in mind, that the California minimum limits really aren't enough coverage. The typical car costs between $20,000 to $35,000. If you have $5,000 of property damage coverage, you may be liable to pay the difference out of your own pocket to repair or replace the person's car that you hit and possibly
wrecked.
The next coverage to include in your new auto policy is "medical payments" to others. This pays for reasonable medical expenses for you and your passengers if injured in an auto accident or as a pedestrian struck by a car. Sometimes people don't purchase this optional coverage. If you have your own medical insurance that covers you and your family, then maybe you don't want to purchase this coverage. But, do your passengers have medical insurance? It's not likely that you're going to check when you're giving the neighbor kids a ride to and from school.
Additionally, some folks don't have their own medical insurance. Adding medical payments coverage onto their auto policy provides some protection in the event of an emergency.
"Uninsured / Underinsured Motorist" provides bodily injury coverage for you. If you get hit by someone that doesn't have auto insurance, or a hit-and-run driver or someone whos auto limits are low, then this coverage will pay for your injuries that you sustain in an auto accident. This coverage also includes "lost wages." If you can't work due to an auto accident, you'll recoup your wages under this coverage. Ideally, your uninsured motorist coverage should match your liability limits exactly. You want to give yourself the same coverage limits that you're giving to someone else under liability coverage in the event of an accident.
Purchase "Uninsured Motorist Property Damage Coverage" only if you don't purchase Comprehensive and Collision Coverage. We'll explain "Comp" and Collision in a few moments. UMPD means that the insurance company will fix your car up to $3,500 if you're involved in
an accident with an Uninsured Motorist and that they can verify this fact. Usually, this coverage is added to cars that are 10 years old or older in place of Comprehensive and Collision coverages.
If your car is brand new or less than 10 years old, then it's wise to purchase "comprehensive and collision" coverage. Any time that your car is financed, the lienholder (the company that you're making your car payments to) will require that you carry these coverages during the life of your loan. Once your car is paid off, it's your choice as to whether you want to include these coverages on your auto policy. Here's what they do for you:
"Comprehensive" pays for other losses to your car such as losses caused by fire, theft, vandalism, glass breakage, falling objects, natural disasters and other causes of loss.
"Collision" protects you from losses resulting from damage to your car due to a collision with another object. Again, using the same example, if you rear end the car in front of you, your car will be repaired under your collision coverage. The other person's car will be repaired under your
Property Damage coverage.
Both comprehensive and collision coverage come with "Deductibles." A deductible is the amount of money that you pay first before the lost is covered by the insurance company up to your policy limits. Deductibles come in a variety of incremental options: $50, $100, $250, $500, $750, $1,000 and higher. You choose the deductible that you want on your policy. The higher the deductible, the lower your auto premium will be. Basically, you're self insuring up to say $750. Anything less than this number and you're paying for it on your own. The insurance company picks up the amount over the deductible to fix your car.
You may have heard of the "Vanishing Deductible." This is a great feature to consider adding into your auto policy. When you add this feature onto your policy, you'll get an instant $100 deductible credit. Then, for every year that you go without an accident or traffic violation, the
insurance company will decrease your deductible by $100. The maximum decrease is $500. You deductible could potentially be $0. If you do get a ticket or into an accident, your deductible will reset to the original number less the $100 deductible credit.
Another nifty coverage to get that's very inexpensive is "Uninsured Motorist Collision Deductible Waiver." If you get into an accident with someone that doesn't have any
insurance and the insurance company can verify this fact, then instead of you paying your $500 to get your car fixed, the insurance company will waive your deductible and you get your car fixed for free! This coverage should be added to your policy when you buy comprehensive and collision
coverage.
While your car is in the shop getting repaired from an accident, you're going to need a rental car. The expense of the rental vehicle is covered under a coverage on your auto policy called "Rental Reimbursement." You can buy this in increments of $25, $30, $40, $50, $60 and $125 of coverage per day for 30 days. So, if you want to rent an economy car, the lower end of the range should cover that expense. If you'd like a luxury car, then purchasing $50 or more of rental reimbursement coverage per day should do the trick.
Another important coverage to add into your new auto policy is "Towing." Although this coverage is being replaced by a broader coverage known as "Roadside Assistance" which includes towing. Basic Roadside Assistance plans include towing services, emergency
fuel, battery jumps, flat tire assistance, lockout service, ditch extraction and more.
An enhanced version of roadside assistance called "Roadside Assistance Plus" includes all of the above and so much more. For example, you'll get 100 miles of towing, turn-by-turn directions over the phone, pre-trip map routing, emergency message relay to keep in touch with
family and friends, and trip interruption coverage. You could get reimbursed up to $500 for alternate transportation, lodging, gas and meals when you're stranded 100+ miles from home due to a vehicle disablement.
All this coverage is available to families for $40 a year. The average wait time for service is 27 minutes. When help arrives, you simply "sign & drive." You won't have to worry about paying money out of pocket when you're on the side of the road. More importantly, unlike other companies that offer roadside assistance, you can use this coverage on an unlimited basis. Use as much as you need it.
All of the auto coverages mentioned are the ones typically found in an auto policy. However, more coverages are available. Visit our other pages under the Car Tab to learn about Special Physical Damage, Loan / Lease Gap, Total Loss Deductible Waiver and New Car Replacement.
Now that you know what should be in your new policy, your ready for a new car insurance quote. If you need any assistance on any step of the way, please call us at 1-888-737-6200 and we'll walk you through it.
Often times, people say that they have "full coverage." Full coverage means different things to different people. For example, it might mean that you have all the coverages that you can possible buy to insure your car. Or, it might mean, that you have high liability coverage, but not necessarily all the available insurance coverages. We'll point out all the available automobile
coverages to you and tell you what they mean.
All auto policies have "liability and property damage" coverages. This is the minimum amount of coverage that you can possibly buy to insure your car. In other words, these are the basic coverages required by law. The minimum amount of liability and property damage coverage required by California State Law is 15/30/5. This means $15,000 per person / $30,000 per accident / $5,000 for property damage. However, it's strongly recommended that you
purchase as much coverage as you can afford. If you're a homeowner, you need to consider higher liability limits such as 100/300/100. If you get into an accident in which you're at fault and the amount of the accident exceeds your policy limits, it is possible for the other party to go after any assets that you may have in order for them to satify their claim against you.
There's no point in losing your home if you can protect it with higher liability limits.
So what is liability insurance? "Liability" coverage pays others for any bodily injury damages you cause to another party. So, if you get into an accident and the people in the other car are injured, your liability will pay for their injuries; not yours or your passengers. That's covered under another coverage.
"Property Damage" coverage pays for damages that you cause to someone else's property. Say that you rear end the car in front of you, then your property damage coverage will pay to repair the other person's car. Also, if you hit a street light, then this coverage would pay for the repairs or replacement of a new street light. It's always best not to hit anything while driving your car; especially people. We understand that accidents happen. Keep in mind, that the California minimum limits really aren't enough coverage. The typical car costs between $20,000 to $35,000. If you have $5,000 of property damage coverage, you may be liable to pay the difference out of your own pocket to repair or replace the person's car that you hit and possibly
wrecked.
The next coverage to include in your new auto policy is "medical payments" to others. This pays for reasonable medical expenses for you and your passengers if injured in an auto accident or as a pedestrian struck by a car. Sometimes people don't purchase this optional coverage. If you have your own medical insurance that covers you and your family, then maybe you don't want to purchase this coverage. But, do your passengers have medical insurance? It's not likely that you're going to check when you're giving the neighbor kids a ride to and from school.
Additionally, some folks don't have their own medical insurance. Adding medical payments coverage onto their auto policy provides some protection in the event of an emergency.
"Uninsured / Underinsured Motorist" provides bodily injury coverage for you. If you get hit by someone that doesn't have auto insurance, or a hit-and-run driver or someone whos auto limits are low, then this coverage will pay for your injuries that you sustain in an auto accident. This coverage also includes "lost wages." If you can't work due to an auto accident, you'll recoup your wages under this coverage. Ideally, your uninsured motorist coverage should match your liability limits exactly. You want to give yourself the same coverage limits that you're giving to someone else under liability coverage in the event of an accident.
Purchase "Uninsured Motorist Property Damage Coverage" only if you don't purchase Comprehensive and Collision Coverage. We'll explain "Comp" and Collision in a few moments. UMPD means that the insurance company will fix your car up to $3,500 if you're involved in
an accident with an Uninsured Motorist and that they can verify this fact. Usually, this coverage is added to cars that are 10 years old or older in place of Comprehensive and Collision coverages.
If your car is brand new or less than 10 years old, then it's wise to purchase "comprehensive and collision" coverage. Any time that your car is financed, the lienholder (the company that you're making your car payments to) will require that you carry these coverages during the life of your loan. Once your car is paid off, it's your choice as to whether you want to include these coverages on your auto policy. Here's what they do for you:
"Comprehensive" pays for other losses to your car such as losses caused by fire, theft, vandalism, glass breakage, falling objects, natural disasters and other causes of loss.
"Collision" protects you from losses resulting from damage to your car due to a collision with another object. Again, using the same example, if you rear end the car in front of you, your car will be repaired under your collision coverage. The other person's car will be repaired under your
Property Damage coverage.
Both comprehensive and collision coverage come with "Deductibles." A deductible is the amount of money that you pay first before the lost is covered by the insurance company up to your policy limits. Deductibles come in a variety of incremental options: $50, $100, $250, $500, $750, $1,000 and higher. You choose the deductible that you want on your policy. The higher the deductible, the lower your auto premium will be. Basically, you're self insuring up to say $750. Anything less than this number and you're paying for it on your own. The insurance company picks up the amount over the deductible to fix your car.
You may have heard of the "Vanishing Deductible." This is a great feature to consider adding into your auto policy. When you add this feature onto your policy, you'll get an instant $100 deductible credit. Then, for every year that you go without an accident or traffic violation, the
insurance company will decrease your deductible by $100. The maximum decrease is $500. You deductible could potentially be $0. If you do get a ticket or into an accident, your deductible will reset to the original number less the $100 deductible credit.
Another nifty coverage to get that's very inexpensive is "Uninsured Motorist Collision Deductible Waiver." If you get into an accident with someone that doesn't have any
insurance and the insurance company can verify this fact, then instead of you paying your $500 to get your car fixed, the insurance company will waive your deductible and you get your car fixed for free! This coverage should be added to your policy when you buy comprehensive and collision
coverage.
While your car is in the shop getting repaired from an accident, you're going to need a rental car. The expense of the rental vehicle is covered under a coverage on your auto policy called "Rental Reimbursement." You can buy this in increments of $25, $30, $40, $50, $60 and $125 of coverage per day for 30 days. So, if you want to rent an economy car, the lower end of the range should cover that expense. If you'd like a luxury car, then purchasing $50 or more of rental reimbursement coverage per day should do the trick.
Another important coverage to add into your new auto policy is "Towing." Although this coverage is being replaced by a broader coverage known as "Roadside Assistance" which includes towing. Basic Roadside Assistance plans include towing services, emergency
fuel, battery jumps, flat tire assistance, lockout service, ditch extraction and more.
An enhanced version of roadside assistance called "Roadside Assistance Plus" includes all of the above and so much more. For example, you'll get 100 miles of towing, turn-by-turn directions over the phone, pre-trip map routing, emergency message relay to keep in touch with
family and friends, and trip interruption coverage. You could get reimbursed up to $500 for alternate transportation, lodging, gas and meals when you're stranded 100+ miles from home due to a vehicle disablement.
All this coverage is available to families for $40 a year. The average wait time for service is 27 minutes. When help arrives, you simply "sign & drive." You won't have to worry about paying money out of pocket when you're on the side of the road. More importantly, unlike other companies that offer roadside assistance, you can use this coverage on an unlimited basis. Use as much as you need it.
All of the auto coverages mentioned are the ones typically found in an auto policy. However, more coverages are available. Visit our other pages under the Car Tab to learn about Special Physical Damage, Loan / Lease Gap, Total Loss Deductible Waiver and New Car Replacement.
Now that you know what should be in your new policy, your ready for a new car insurance quote. If you need any assistance on any step of the way, please call us at 1-888-737-6200 and we'll walk you through it.
