Tuesday, September 14, 2010

Car Insurance: How It Works

You know that you need car insurance. You know that you are required by law to have it and that the price varies widely. You know that there are many different companies who offer insurance. You spend weeks researching companies and finding the best deal for what you need. 

But do you know how car insurance actually works? Policies usually have a few different kinds of basic coverage. 


You have to have liability insurance in most states. Liability coverage will cover the damage you might do to other people or to property with your vehicle. It's important to remember that liability insurance will not cover injuries to you or to other people that are on your policy. 

Liability coverage is quoted in a series of three numbers. For example, 25/500/25. Don't get it? 

The first number is how many thousands of dollars your insurance policy will pay for every person, including you, that is injured in a car accident. This particular example would mean that the policy will pay $25,000. 

The second number is the total amount that your policy will pay if there is an accident. In this particular example, the policy would pay $500,000. 

The last number lets you know how much your policy would pay if there is any property damage. Here the policy would pay $25,000. 

Collision and Comprehensive

Collision insurance is what it sounds like: it will cover damage done to your car when you hit or get hit by another vehicle or an object. But collisions are not the only things that can damage your car. That's where comprehensive insurance comes in - it pays for damages that are caused by things other than collisions, such as theft, fire, floods, alien invasions, and so on. 

This type of coverage makes more sense for new vehicles. If you are making payments on your car, then usually it is required. On older cars, this kind of coverage is not as necessary and may be a waste of money. 

Personal Injury Protection (PIP)

PIP insurance is something that you definitely want. This is also known as "no-fault" insurance. Certain states require it. It pays the medical costs you have if you get injured in an accident and may also possibly pay for any lost wages. Some policies will also cover the passengers in your car as well as pedestrians.

Uninsured Motorist 

Can you guess what this is? This insurance covers both you and your passengers if you are involved in an accident where the other driver doesn't have insurance. This kind of insurance also covers hit-and-run accidents.

Let Manly Automotive Group help you in your new and previously owned vehicle choices today stop by our website today and drive away knowing that you made the right choice with us! http://www.manlyauto.com/ We also can be found on Twitterhttps://twitter.com/ManlyAuto and Facebook http://www.facebook.com/pages/Santa-Rosa-CA/Manly-Auto-Group/103413126362572?v=wall&__a=3 & stop on over and visit us!

1 comment:

  1. Thanks for the clear explanation on such a confusing subject! I was one of those - have the insurance but have no idea what it actually does - people. Now I know and feel a bit more in control.