Everyone searches for ways to save. Whether its choosing Costco over Whole Foods, or taking public transit to work in lieu of driving, most people are looking for ways to stretch that extra buck as far along as possible.
Car insurance is no different. We here at EINSURANCE believe saving is certainly good, but everything has its limits. In efforts to secure the best pricing, we fear that shoppers of car insurance may be overlooking coverages that could potentially save them a lot of heart ache, and possibly money, in the long run. In doing so, we have sought out to review the common auto policy, analyze the coverages and discern those coverages that are absolutely necessary, those that you should probably take a second look at, and those that can perhaps be scrapped altogether.
Coverages That Are Absolute Necessities In Your Car Insurance Policy
Given every state has a required minimum suite of auto coverages you must have when operating a vehicle, it seems the bare necessities in terms of coverage have been determined. Those typical auto coverages are the following:
- Liability Insurance: Typically split between bodily injury and property damage, and covers you for accidents that you cause. Bodily Injury limits are stipulated on a per person and accident basis, while property damage limits are on a per accident basis.
- Personal Injury Protection (No-Fault Insurance): Typically required in no-fault states, and helps cover your medical expenses after an accident, regardless of who is at fault.
- Uninsured Motorist Bodily Injury Coverage: Provides coverage when you’re in an accident with a driver that has no insurance. Limits are typically defined on a per person and accident basis.
- Underinsured Motorist Coverage: Provides coverage when you’re in an accident with a driver that doesn’t have adequate insurance limits to cover the damage. Both bodily injury and property coverages are offered, although bodily injury is typically the type of underinsured motorist coverage required by states. Limits are typically defined on a per person and accident basis.
Regardless of whether your state requires all four of the coverages listed above, these coverages represent a foundation of insurance for which you can operate a vehicle comfortably, and with peace of mind. Virtually all states require some form of bodily injury and property damage coverage, thus the only true electives in this group of coverages are Personal Injury, Uninsured and Underinsured Protection. Given the latest U.S. driving statistics show that circa 13% of drivers are uninsured(1), which indicates that the percentage of underinsured drivers is even higher, emphasizes the need to carry this 1st layer of insurance protection with these four auto coverages.
Often Overlooked Coverages, That You Should Add To Your Car Insurance Policy
Now that we have established a base of adequate coverage, lets look at a few additional products that are useful, and could provide significant value, especially in the long run.
Listed in order of importance:
- Collision Coverage: May seem to be the most straightforward but note that this coverage is NOT required in any state. Collision coverage provides funding to replace or repair your asset (your Car!) after an accident. This coverage can prove extremely valuable as it minimizes the amount of time you are without your primary mode of transportation. Which could equate to less of a financial impact, should you use your vehicle to get to work.
- Comprehensive Coverage: Provides protection from theft, or if your car is damaged by a natural peril, such as fire or flood. Similar to collision coverage, comprehensive can minimize the financial impact of not having your primary mode of transportation
- Umbrella Coverage: As its name implies, umbrella coverage covers you regarding home and auto claims. When your liability limits from either your home or auto policy have been exhausted, umbrella can provide an extra layer of protection. Essentially, providing additional cushion as it relates to you personally absorbing any costs associated with an unforeseen accident.
- Rental Reimbursement Coverage: Assuming your car cannot be repaired or replaced in a timely fashion, rental reimbursement coverage will cover the rental car expense, assuming your accident is covered under your comprehensive or collision protection. Typically, this coverage is not expensive, but could provide heaps of saving by decreasing the down time you endure without a vehicle.
- Medical Payments Coverage: Although this is last on our list of extra coverages, and we at EINSURANCE hope you never have to use it, it is certainly best to have it and not need it, than not have it at all. Medical payments provide protection against medical expenses involving an accident. Its very similar to Personal Injury Protection coverage. As such, make sure you carry at least one of these coverages.
Now Let’s Go Secure Your Car Insurance Coverage!
When shopping for car insurance, its fairly natural to focus on the car and how you may be able to afford or absorb any costs associated with an accident. People are often a secondary focus, YOU being the one most forgotten about. The coverages above ensure that:
- You, and anyone involved in a potential accident will be covered for any medical care they may need, and
- The financial impact to you is minimized through shortening the length of time you are without a vehicle, and providing extra layers of protection between the expenses associated with any potential accident and your bank account.
Now that you know what coverages matter, lets go and get car insurance with EINSURANCE.com!