What does Auto Insurance Cover?
An auto insurance is a policy purchased by vehicle owners to mitigate costs associated with getting into an auto accident. Instead of paying out of pocket for auto accidents, people pay annual premiums to an auto insurance company; the company then pays all or most of the costs associated with an auto accident or other vehicle damage.
Auto insurance provides property, liability and medical coverage:
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Property coverage pays for damage to or theft of your car.
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Liability coverage pays for your legal responsibility to others for bodily injury or property damage.
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Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.
The Benefits of Auto Insurance
Auto insurance can help offset the cost of:
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Vehicle repairs due to damage caused in an accident.
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Vehicle repairs due to damage caused by something other than an accident (e.g., flood or vandalism).
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Medical expenses due to bodily injury to yourself and others resulting from an accident.
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Lost wages due to injury resulting from an accident.
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Benefits to survivors when an accident results in death.
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Lawsuits, including legal fees, brought against you as the result of an accident.
Types of Auto Insurance Coverage
CA Law states that you must have auto liability insurance (or the ability to pay any judgment against you) if you cause injury to another person, vehicle or other property while operating a motor vehicle.
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Bodily Injury – Covers any bodily injury to the other party up to $15,000 per person, $30,000 per occurrence.
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Property Damage – Covers any property damage that you may have caused to the other party up to $15,000 per occurrence.
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Uninsured Motorists – This pays you and passengers in the insured vehicle monetary damages to recover from bodily injury or death caused by an uninsured or hit-and-run motorist up to $15,000 per person, $30,000 per occurrence. This is only for your bodily injury, not damage to your vehicle.
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Medical – You can also get medical payments with your auto insurance liability policy; this is an optional coverage and is not legally required. These payments will cover your medical coverage if you or your passengers are injured during a car accident.
In addition to the above mandatory auto insurance, you may opt for the following auto insurance options:
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Collision – Pays for loss or damage to your vehicle caused by collision with another vehicle or object. Payments are made based upon actual cash value of the amount of each loss above the deductible amount. The lower your deductible (amount paid out of pocket), the higher the cost of the auto insurance.
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Comprehensive – Pays for loss or damage to your vehicle caused by fire, theft, vandalism, weather, etc. Payments are made based upon actual cash value of the amount of each loss above the deductible amount.
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Repair Deductible – You will have to pay a deductible to get your vehicle fixed. After you pay your deductible, your auto insurance company pays the balance.
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Rental & Towing – This coverage will reimburse you if you need to have your vehicle towed following an accident or break-down or should you need to rent a vehicle following an automobile accident. Coverage and rates vary with policy stipulations.
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