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Auto Insurance 101

In the simplest way possible, auto insurance is a contract between a policyholder and an insurance company. The policyholder pays the premium while the insurance company agrees to pay any losses that are outlined within the policy.

Most U.S. states require drivers to have auto insurance before they can legally drive a car. This is because liability insurance, which is provided to the policyholder by an auto insurance company, also pays the other driver’s medical bills, car repair, and other costs that come with an auto accident when the policyholder is at fault. All states also have laws that set the minimum amounts of insurance or other financial security that drivers must pay if they cause harm due to their own negligence while behind the wheel.

A basic auto insurance policy is made up of six different kinds of coverage, which we will discuss below. If you have any further questions about auto insurance policies or are looking for an individualized policy to suit your needs, give Abercorn Insurance Agency in Savannah a call today!

1. Comprehensive Coverage

Comprehensive auto coverage reimburses the policyholder for loss due to theft or damage caused by something other than a collision with another car or object. Common incidents include fires, falling objects, earthquakes, hail, floods, vandalism, riots, or contact with animals. It may also cover policyholders if their windshield is cracked or shattered.

This type of auto coverage is typically sold with a $100–$300 deductible, although policyholders may opt for a higher deductible as a way of lowering their premium.

2. Collision Coverage

Collision coverage pays for damages to the policyholder’s car that result from a collision with another car or object, or as a result of flipping over. It is generally sold with a deductible of $250–$1,000. Even if the policyholder is at fault, this type of coverage will reimburse them for the costs of repairing the car, minus their deductible.

3. Bodily Injury Liability

Bodily injury coverage applies to injuries that the policyholder and any listed family members listed on the policy cause to someone else. Due to the fact that motorists who are involved in serious accidents can end up being sued for large amounts, drivers can opt to purchase more than the state-required minimum in order to protect their personal assets such as their homes and savings.

4. Medical Payments/Personal Injury Protection

This auto insurance coverage will pay for any treatment of injuries to the driver and/or passengers of the policyholder’s car. It can cover lost wages, medical bills, and the cost of replacing the services performed by an individual injured in an auto accident. It may also cover funeral expenses.

5. Property Damage Coverage

Property damage auto insurance coverage pays for any damages that the policyholder may cause to someone else’s property, such as driving another person’s car with their permission. It can also include damage to lamp posts, fences, and other structures hit in an auto accident.

6. Uninsured or Underinsured Motorist Coverage

Uninsured motorist coverage reimburses the policyholder, a family member, or a designated driver if one of them is hit by an uninsured driver. Underinsured motorist coverage, on the other hand, will come into play if an at-fault driver has insufficient insurance to pay for the other driver’s total loss.

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If you are interested in learning more about each type of coverage within a basic auto insurance policy or are looking for auto insurance for yourself and your family in Savannah, give us a call today at Abercorn Insurance Agency! We would be more than happy to help you find the perfect coverage to fit your needs.