What Does Your Auto Coverage Actually Mean?
In most states, it is a requirement that you carry at least auto liability coverage on your car.
If your vehicle is leased or financed, you will also need to carry what they call physical damage coverage.
Let us take a moment and break down what each of these coverages actually mean.
Auto Liability This coverage protects you in the case that you are help liable for an accident.
It does not cover your vehicle, rather it covers you for the damage that you held liable for.
This would include a third parties vehicle, property damage, bodily harm, etc.
that you have been found liable for.
Again, this does not cover your car.
Physical Damage This is the coverage that will cover your vehicle in the case of a loss.
This coverage can kick in whether you are at fault or not depending on the circumstance.
There are two primary components to physical damage - Comprehensive Coverage This, for the sake of conversation, will cover your vehicle for just about anything OTHER than a collision.
Maybe your vehicle is stolen or vandalized.
It is this coverage that will kick in to cover that particular loss.
Collision Coverage This is the coverage that WOULD cover you for a collision.
If you were to strike another vehicle, your collision coverage will cover the loss to YOUR vehicle.
Your auto liability coverage would cover the loss to the OTHER person's vehicle.
In most cases, the comprehensive and collision coverages require that you pay some form of a deductible.
The most common deductible is either $250 or $500.
Of course this varies depending on the insurance company.
Essentially you are responsible for your deductible in the event that you are going to get your vehicle repaired for a loss that is not the fault of anyone else.
Say you have $2500 worth of damage to your vehicle and you have a $500 deductible.
The insurance company would most likely pay the $2000 while you would pay the $500.
This is just a brief run down of the most basic coverages.
Of course, there is a lot more than just what I listed here.
For more information, I would recommend that you contact your insurance agent.
If your vehicle is leased or financed, you will also need to carry what they call physical damage coverage.
Let us take a moment and break down what each of these coverages actually mean.
Auto Liability This coverage protects you in the case that you are help liable for an accident.
It does not cover your vehicle, rather it covers you for the damage that you held liable for.
This would include a third parties vehicle, property damage, bodily harm, etc.
that you have been found liable for.
Again, this does not cover your car.
Physical Damage This is the coverage that will cover your vehicle in the case of a loss.
This coverage can kick in whether you are at fault or not depending on the circumstance.
There are two primary components to physical damage - Comprehensive Coverage This, for the sake of conversation, will cover your vehicle for just about anything OTHER than a collision.
Maybe your vehicle is stolen or vandalized.
It is this coverage that will kick in to cover that particular loss.
Collision Coverage This is the coverage that WOULD cover you for a collision.
If you were to strike another vehicle, your collision coverage will cover the loss to YOUR vehicle.
Your auto liability coverage would cover the loss to the OTHER person's vehicle.
In most cases, the comprehensive and collision coverages require that you pay some form of a deductible.
The most common deductible is either $250 or $500.
Of course this varies depending on the insurance company.
Essentially you are responsible for your deductible in the event that you are going to get your vehicle repaired for a loss that is not the fault of anyone else.
Say you have $2500 worth of damage to your vehicle and you have a $500 deductible.
The insurance company would most likely pay the $2000 while you would pay the $500.
This is just a brief run down of the most basic coverages.
Of course, there is a lot more than just what I listed here.
For more information, I would recommend that you contact your insurance agent.
