Car insurance is one of the few things in life you pay for every month and hope you never have to use. After all, to use it you have to have something bad happen; sometimes something very bad. Car crashes, theft, vandalism…none of it makes it to the list of “things I hope to experience this year.” But if you are going to pay for it – like all good, law-abiding citizens do – than you need to make sure you have the right coverage and proper limits. After all, it could save your life…your financial life that is.
1. Bodily Injury: Pays for medical bills, rehabilitation, work loss and pain and suffering to other people if you injure their bodies - that's why it's called bodily injury! In most states, he who causes the accident is responsible for any and all expenses that result from that accident. In other words, if you crash into someone, it is your responsibility to pay to get them fixed up. If you watch Grey’s Anatomy, Trauma, or any other medical shows out there than you know how expensive that can be. The ambulance ride alone can cost upwards of $10,000, and that’s just to get you where you’re going. Add on the hospital bills, lost wages and an attorney seeking pain and suffering, and you’re staring down the barrel of a ½ million dollar lawsuit!
2. Property Damage: Pays for the repairs or replacement of, you guessed it, any property you damage. Remember the classic "Planes, Trains and Automobiles"? If you run into any one of them (or all of them if you happen to be making one of the "Die Hard" sequels) this is the coverage that pays for the damages. Make sure you have enough to replace at least a couple of new cars - real cars that cost $25,000 each. If you only have enough in your policy to buy one car, the other car comes out of your pocket!
3. Uninsured/Underinsured Motorist Bodily Injury: In case you've been in a cave for the past year or haven't noticed, the economy is less than perfect lately. With a poor economy comes higher unemployment, and with higher unemployment comes a MUCH higher rate of drivers who do not carry insurance. It's not that they're bad people; they've just decided to spend their money on other things - like food! If someone runs into you and they do not have insurance, you're uninsured motorist coverage pays the damages that their insurance would normally pay. Specifically, your medical bills, rehabilitation, work loss and pain and suffering.
While there are numerous other coverages - all of which being important - it is the bodily injury, property damage and uninsured motorist claims that most often lead to the largest losses. Talk to your personal agent and make sure you have the proper coverage to protect your family. After all, that's why you have insurance.
By Robert Edgin
This is part two of a four part series on Proper Insurance Coverage