Recent graduate? Have a family now? Moved out of your family’s house? Has the time come for you to get off of your parent’s car insurance policy? Are you ready to be more responsible for yourself and your future? There are a few things you need to know about car insurance.
1. Basic Liability Car Insurance Isn’t Enough
When it comes to car insurance, basic liability coverage is like not having insurance at all. Basic liability insurance is simply the absolute bare minimum the law requires. It protects someone else if you cause a car crash. It doesn’t protect you, and it surely doesn’t protect the people in your car like a spouse or partner, children, or your property.
2. Good Insurance Is More Affordable Than You Might Think
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Good car insurance isn’t that expensive, so get all you can afford. Optional coverage is only a band aid if you don’t actually get decent policy limit coverages, so don’t skimp. Coverage you need is discussed below.
Now, let’s talk about some car insurance terms you need to know when researching your car insurance options. Any competent insurance agent should tell you these, but learning on your own is a great way to be prepared.
This is the general term that covers everything inside your policy. There are many “optional coverages” of a policy that can change and vary, so you need to look deep.
This is the maximum benefit that will be paid out under any term of the policy. You want high policy limits, which means you have a good amount of insurance on each term. Good examples of policy limits for different terms are:
- Liability: $250,000
- Uninsured/Underinsured Motorist: $250,000
- Med Pay: $50,000.
This is the type of coverage that pays someone else if you are at fault for a crash, and ensures you don’t get sued. Or if you are at fault for a crash, and you injure one of your passengers, this is what pays them.
Do you want to get sued if you injure someone else? If not, then get plenty of this coverage.
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These are the different terms that make up the car insurance policy. Optional coverages INSURE YOU AND YOUR FAMILY. Coverages you should have are:
- Medical Payments Coverage (Med Pay)
- Uninsured Motorist Coverage (UM)
- Underinsured Motorist Coverage (UIM)
- Comprehensive and Collision coverage.
Now that you know just enough to be dangerous, let’s talk about what these coverages are and why you need them.
Medical Payment Coverage
This pays medical bills you incur from injuries sustained in a crash, regardless of who is at fault for the crash. You should get a ton of this. However, look closely at the policy and make sure the company doesn’t cut off this coverage after 1 year, it should cover up to at least 2 years. The best policies have no cut off.
Med Pay is one of the most important types of coverage. It is often the difference between taking home only hundreds of dollars instead of thousands of dollars in a vehicle collision where you are injured. Medical bills can easily exceed $20,000 for fairly minor injuries these days, so get enough Med Pay to pay for these bills.
Uninsured/Underinsured Motorist Coverage
These are two different coverages that are often bundled together. Uninsured motorist coverage ensures there is money for you and anyone in your car in the event an uninsured driver causes an accident with you. This pays you for your injury claim. If you don’t have it, then nobody pays you if the other driver is not insured and your injuries are their fault.
Underinsured motorist coverage is slightly different. This is where the other driver causes a crash but only has minimal car insurance, or at least doesn’t have enough auto insurance coverage in their liability policy limit to fully compensate you. This insurance will then step in the place of the other guy’s auto insurance, once theirs has been spent to become an additional source of money for you to be compensated by.
These coverages are obviously very important to protect yourself and your family in a serious injury crash and ensures enough money exists to fairly compensate you and the people you love enough to have in your car.
This is what will repair your car, regardless of who is at fault. If it is your fault and you want to fix your car, just pay your deductible and it will get fixed. If a crash is not your fault, but the other car insurance company is dragging their feet, this will allow your company to fix the car quickly. Then you’ll just get your deductible back from the other insurance company.
Buy Car Insurance Locally!
You should discuss these coverages and others with your local car insurance agent to become a pro. Actual local agents can get you better rates!
But wait, you’re a millennial and like doing things online? Maybe you’re thinking about buying your car insurance online and don’t have a local agent? Stop.
This article is about growing up and doing responsible things. This includes finding a local auto insurance agent helping you make such decisions and acting in your best interest. Insurance agents are free and their job is to help you understand all these terms and find the best policy for your budget. Buying online will universally get you a worse policy that a local agent will.
The best way to find a trustworthy local car insurance agent is to simply ask people you trust. Find out who they use and talk to at least 2 different agents.
How to Get The Car Insurance You Want?
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Just ask! It’s your insurance agent’s job to help you get the coverage you want at a price that’s affordable to you. Don’t be afraid to ask one company to match another’s quote. You’ll never get a better deal if you don’t ask for it!
More questions about car insurance? Leave a comment below!