Auto Casualty Insurance

Types of Auto Casualty Insurance You Need to Know About

You may not like it, but vehicular insurance is an essential element of car ownership.  In spite of being extra careful while in the driver’s seat, accidents happen. Sometimes caused by our own doing, sometimes it’s the other guy’s fault…and in today’s litigation-happy society, being at fault in a serious accident can be an extremely costly experience.

Furthermore, state law makes it illegal in most states to drive without car insurance.  Except in New Hampshire and Wisconsin, where it is optional, every driver is required to have liability coverage.

Knowing the basics of auto casualty insurance is the critical first step toward complying with the law, as well as minimizing the unexpected expense of a car accident.

Here’s a summary of basic coverages:

  • Liability Coverage. This element of the auto insurance policy covers property and medical damages caused by a vehicular accident for which you are at fault. Should a victim file a lawsuit, liability coverage comes to your rescue.
  • Collision Coverage. This coverage is optional.  However, if a vehicular accident is deemed to be your fault, collision coverage will pay for the repair of your car.  You contribute a predetermined dollar amount to the repairs (called a deductible), and your insurance company pays the balance. If your car is a total write-off, the insurance company pays you the cash value of your vehicle.
  • Comprehensive Coverage. This coverage is also optional.  This feature covers theft (equivalent to the vehicle’s market value), windshield damage, vandalism and damages caused by flood, fire, falling trees and other hazards due to unfortuitous events (otherwise called “acts of God”).
  • Personal Injury Protection (PIP). Personal injury protection covers medical and disability expenses, as well as loss of income for the driver and passengers regardless of who is at fault.  PIP is mandatory in no-fault states and optional in the others.
  • Uninsured Motorist Protection. This coverage kicks in where your car accident is due to the other driver’s fault and he is uninsured or underinsured.  It covers bodily injury and property damages.

While requirements in very state are somewhat unique, the above basics hold true in nearly every auto insurance situation.  A good local insurance agent will be familiar with the laws of your particular state.  It’s a good idea to seek his advice on the amount of insurance to purchase.

You may also want to ask the agent about their claims handling practices.  Ask questions about how repair estimates are obtained, the time allowed for filing claims and when claims are paid.

It takes a little homework on your part to know the basics of auto casualty insurance.  Your reward, however, is being sufficiently informed to make wise and cost effective decisions.