A Visual Guide to Auto Insurance (3-D Interactive)

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A visual guide to auto insurance

Even the most basic car insurance has complex details —
use this guide to sort out intricate coverage questions.

Others

Liability

Liability covers damage caused by you to another person or their property. This is the minimum insurance required in most states.

Liability does not cover you, your passengers, or your property.

Coverage limits

Liability insurance often contains three types of coverage.

(example limits shown, your policy will vary)

$50,000

Bodily injury per person

Coverage limit per person for bodily injury.

$100,000

Total bodily injury

Total bodily injury coverage per accident, including all claimants.

$25,0000

Property damage

Total property damage coverage per accident.

Your property

Collision

If you are at fault, collision insurance covers certain types of damage to your own car.

Examples of covered events

Collision with another vehicle

Collision with an object, like a mailbox, tree, or guard rail

Single-car falling or roll-over accident

Comprehensive

Comprehensive insurance generally covers non-driving related damage to your car.

Examples of covered events

Theft/Vandalism

Natural disasters

Fire

Striking or being struck by an animal (including while driving).

Deductible

The deductible is the amount of risk you assume before using insurance coverage.

Deductibles guard against insurance misuse, since a person may not drive as carefully if they believe all damage is paid for.

Uninsured / underinsured

Uninsured or underinsured insurance protects you in accidents with at-fault drivers that have too little or no insurance, and may cover bodily injury, property damage, or both.

This insurance may have some overlap with collision insurance or your personal healthcare, but can offer superior coverage for things like lost wages, disability, and passenger injuries.

High risk and SR-22

Some drivers may require high-risk insurance, which often carries higher premiums. High risk events may influence premiums anywhere from 3-10 years.

Events related to high risk insurance:

DUI or DWI conviction

Excessive speeding, illegal racing, or reckless driving

Driving without a license

Driving without insurance

Any traffic-related incident that results in a fatality

SR-22

SR-22 is the name of the document that insurance companies are required to file with state offices for high risk policies. If a high risk policy is canceled or expires, insurers must also notify the state.

You

Personal Injury Protection

Personal injury protection can be used regardless of fault.

Examples of covered items:

Medical payments

Disability related benefits for lost wages or incurred expenses

Funeral or burial expenses

Medical payments

Medical payments insurance covers accident-related medical payments only, and may overlap with personal healthcare insurance.

No fault state

In a no-fault state, your own policy covers non-property related claims no matter who is at fault. No-fault states may require Personal Injury Protection insurance for this purpose.

Tort state

In a tort state, the at-fault party is responsible for non-property related claims, even if fault is determined to be 50/50. Usually this involves some kind of lawsuit.

Common rate misconceptions

Q.

Why don’t rates go down for older cars or years of good driving?

Q.

Why can rates increase even without policy changes or new claims?

A.

Overall risk is part of premium calculation, which includes factors you don’t control.

Example

Your car may be inexpensive but if you live in a city of exotic cars, an accident you cause could mean high payouts for your insurer.

Example

A year of unusually frequent and aggressive hail storms might increase premiums in your area.

Insurance generally follows the car

If you lend your car, you lend your insurance also. However, you aren’t liable if someone takes your car without permission.

Diminished value claims

If an accident was not your fault, you may be able to claim diminished value against the at-fault’s insurance, meaning that even with full repairs your car has lost value after an accident.

Newer cars with greater accident damage are better candidates for diminished value, however, laws can vary widely between states and counties for this type of claim.

Total loss

If the cost to repair approaches total vehicle value, it will probably be a total loss. State laws and insurance companies vary from 60% - 80% of total value.

REFERENCES

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