YOU & YOUR VEHICLES

In the United States, auto insurance covering liability for injuries and property damage done to others is mandatory in most states, though enforcement of the requirement varies across the U.S. Penalties for not carrying auto insurance vary by state, but often involve a substantial fine, license and/or registration suspension or revocation, as well as possible jail time in some states. Usually, the minimum required by law is insurance to protect third parties against the financial consequences of loss, damage or injury caused by a vehicle.

Insurance coverage on vehicles can cover some or all of the following: The insured party; The insured vehicle; Third parties (car and people). In some States coverage for injuries to persons riding in the insured vehicle is available without regard to fault in the auto accident (No Fault Auto Insurance) Different policies specify the circumstances under which each item is covered. For example, a vehicle can be insured against theft, fire damage, or accident damage independently. Depending on your location, insurance premiums can either be directed by the government or determined by the insurance company according to a set of regulations set by the government. Often times, the insurance company will have more freedom to set the price on physical damage coverages than on mandatory or required liability coverages. When a premium is not set by the government, certain statistics and data play in the calculation of the exact premium.

Those factors can include the make, model, year, etc. of the vehicle, the coverage selected (deductible, limit, additions), the profile of the driver (age, gender, driving history) as well as the usage of the car (commute to work or not, predicted annual distance driven).

Full Coverage

Full coverage is the label commonly given to carrying both Comprehensive and Collision Insurance.

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Liability Insurance

Coverage offered for bodily injury and/or property damage such that the insured driver is assumed responsible. The amount of coverage provided (a fixed dollar amount) may vary and the policyholder can in most cases increase the coverage (prior to a loss) for an additional charge. An example of Property Damage is where an insured driver collides with a street light and damages the light, liability coverage pays for the damage caused. An example of Bodily Injury is where an insured driver causes bodily harm to a third party and the insured driver is blamed responsible for the injuries. In some cases, the third party would first exhaust coverage through their own insurance (assuming they are carrying it).

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Collision Insurance

Coverage for the policyholder's vehicle that is involved in an accident, subject to the deductible outlined in the policy. Collision is designed to provide payments to repair the damages or full payment of the value of the vehicle if it is not repairable, commonly referred to as totalled. Collision is optional, however many lenders will usually require you to carry collision coverage for the term of the loan.

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Comprehensive Insurance

Coverage, subject to a deductible, for an policyholder's vehicle that is damaged by incidents that are not considered Collisions. These incidents would be best desccribed as fire, theft (or attempted), weather or impacts with animals.

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Uninsured/Underinsured Insurance

Provides coverage if an the person(s) at fault either does not have insurance or does not have enough insurance.

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Loss of Use

Also known as rental coverage, provides reimbursement for rental expenses associated with having an insured vehicle repaired due to a loss covered under your policy.

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Loan/Lease Payoff

Otherwise known as GAP coverage (insurance) Due to the sharp decline in the value of a newly purchased vehichle there is often a negative equity situation where you owe more to the lender or lessor on the vehicle. GAP coverage will provide coverage for the amount remaining on your loan or lease in the event of covered claim.

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Towing

Car towing coverage is also known as Roadside Assistance coverage. In the past, automobile insurance companies had agreed to only pay for the cost of a tow that is related to an accident that is covered under the automobile policy of insurance. This left tows that are related to mechanical breakdowns, flat tires and gas outages uncovered. To provide coverage for such instances, insurance companies started to offer the car towing coverage, which pays for non-accident related tows.

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Personal Property

If personal items in a vehicle are damaged due to an accident that would not be a covered under the auto policy. Any type of property that is not attached to the vehicle should be claimed under a homeowners or renters policy.

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COVERAGE TYPES

• Full Coverage
• Liability
• Collision
• Comprehensive
• Uninsured/Underinsured
• Loss of Use
• Loan/Lease Payoff
• Towing

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