Setting up your Auto Insurance Owning a vehicle is one of the basic parts of being a member of American society. Getting a car means mobility, and mobility means freedom! Along with that freedom comes responsibility: the responsibility to look out for your fellow motorists. While most agree that being responsible is the right thing to do, all fifty states have put financial responsibility laws that apply to motorists on the books. There is more to insurance, however, than just “having it” or “not having it.” There are different levels that a savvy motorist should know about it. LIABILITY INSURANCE Liability insurance, as mentioned before, is required in all fifty states for any vehicle on the road. Liability is expressed in the following format: 50/100/50. What that means in plain English is, if you have these levels on your auto insurance, you have $50,000 worth of insurance for Bodily Injury for one person, $100,000 for the whole accident for Bodily Injury, and $50,000 worth of insurance for Property Damage. While the Property Damage portion could apply to any type of property damage you cause in your vehicle, it usually means “the other guy’s car.” It’s important to realize that liability insurance applies to “the other guy,” not your car. If you are in an accident, and it’s your fault, your liability insurance will pay for the other person’s losses, up to the policy limits, but you are on your own. This leads us to the next level of insurance. FULL COVERAGE This term gets used quite a bit in the insurance trade, but there is actually no such thing as “full coverage,” since there is no way that every single cause of loss could be covered. What it usually means, however, is someone has liability, comprehensive, collision, and uninsured motorist. Some people also include fringe coverages like roadside service and rental car reimbursement in the term full coverage. “Full coverage” insurance is most often used in the context of providing coverage for the vehicle in the event of theft, collision, or unexplained damage to the vehicle. Banks that give loans on cars require that vehicles on which they hold the note carry full coverage. Their logic is, they want to make sure that they can get their portion of the investment on the vehicle back in the event of a loss. While “full coverage” is not necessary to drive legally, it makes sense in many cases, especially when the insured does not have the resources to buy another car in the situation in which the car is destroyed or stolen. Fringe coverages, while also not required, can make life much easier in the event of a loss. To find out what coverage meets your life situation, it is best to sit down with an experienced, licensed insurance agent to go over your particular situation to see what makes sense for you. While I hope you find this information useful, this does not replace advice given by an agent with first knowledge of your life situation. If you would like to discuss your personal situation, please feel free to contact me via email at dave@thedaveowens.com or you can call me or my licensed staff at (661) 946-4224. We’d love to hear from you!
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AuthorDave Owens, Owner/Agent. I have proudly served in the Insurance Industry for over 20 years. Archives
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