Understanding Your Auto Insurance by Pamela S Thibodeaux (c) 2015
People grumble and complain about being forced to insure their automobiles, but most folks don’t understand their auto insurance much less the benefits of having it. Whether your realize it or not, every time you leave home everything you own is literally in the trunk of your car!
Auto insurance is comprised of three parts, each protecting a different source of assets. Let’s look at each component of your auto insurance and see why it’s important that you maintain appropriate coverage.
Liability Insurance is basic and what the law requires. This takes care of the other person or persons if you are involved in an “at fault” accident. Many states require a motorist to carry 15/30/25 liability. But let’s take a closer look at what these numbers mean and whether or not you need to increase your coverage.
The first portion of Liability coverage 15/30 is bodily injury; this means that the policy will pay up to $15,000 per person with a maximum of $30,000 per accident. Enough, you say. Well what if there is more than one vehicle involved in the accident with you or worse, suppose someone is killed as a result. Consider the fact that you can be sued for damages and compensation can be awarded in many ways such as taking the equity out of your home, garnishing your wages and seizing your future earnings and/or inheritance.…do you think this is enough?
The last 25 of the equation (15/30/25) is property damage – the property you damage as a result of the at fault accident. With the price of vehicles these days, $25,000 doesn’t go far and if there are more than one vehicle involved, that amount is pro-rated per vehicle many times forcing the victims to file against their own auto insurance.
Uninsured Motorist Coverage or UMBI is the portion of your auto insurance that protects you in the instance you’re not at fault and the other person doesn’t have liability insurance or as in most cases doesn’t have enough liability coverage to take care of your bodily injury. These limits are usually equal to the liability limits of 15/30. Again, suppose you are killed as a result of this accident…is 15/30 enough to care for your medical bills and/or family once you’re gone? Do you have sufficient life insurance to cover this instance?
Uninsured Motorist also comes with PD or property damage that can be on your policy in the absence of comprehensive and collision. It works like collision with a deductible and under the conditions that you are in an accident with an uninsured motorist and not at fault. This may also benefit in the instance of a hit and run incident.
Comprehensive and Collision coverage protects your vehicle– your investment in the instance that you are at fault or if you’re not at fault and the other motorist has no liability insurance. Although many believe that Comprehensive covers glass only, it also protects you in the instance of fire, flood, theft and falling objects.
This is a brief overview of your automobile insurance. For more details, set up a meeting with your agent and make sure you understand all of your coverage and how it applies to each possible circumstance and by-all-means make sure you are adequately covered!
Award-winning author, Pamela S. Thibodeaux is the Co-Founder and a lifetime member of Bayou Writers Group in Lake Charles, Louisiana. She has over twenty years experience in bookkeeping, insurance and tax preparation. Multi-published in romantic fiction as well as creative non-fiction, her writing has been tagged as, “Inspirational with an Edge!” ™ and reviewed as “steamier and grittier than the typical Christian novel without decreasing the message.”
*One-Time Digital Reprint Rights Available for $5.00 through PayPal. Byline must stay intact. Link back to Article and Bio greatly appreciated!