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Automobile
Insurance... Page 2
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3) Uninsured or
Underinsured Motorist Protection
Uninsured/underinsured motorist protection is designed to cover the costs of an accident
where the driver at fault is not insured or doesn't carry enough insurance. Costs normally
include pain and suffering, lost wages, or medical injuries sustained by you or your
passengers.
You may not need uninsured motorist protection if you already have a medical or long-term
disability plan at home or work -- making the coverage redundant. You may need less
protection if you also carry a large amount of no-fault protection. With no-fault
insurance, insurers pay their own client's loss regardless of who caused the accident.
4) Physical Damage
There are two types of coverage that pay for physical damage to your vehicle.
- Comprehensive
Pays for repairs if your car is damaged from vandalism, hail, flooding, or fire. Also
covers if your car is stolen.
- Collision
Covers your car in an accident regardless of who is at fault.
Comprehensive and collision
generally do not cover the entire damage done to your vehicle. You're normally required to
pay a deductible before your insurance company settles on a claim. So if you have
a $500 deductible on a $10,000 claim, you would pay the first $500 in damages. Your
insurer would pay the remaining $9,500. The higher deductible you choose, the less you're
going to pay -- and the less your insurer is going to cover.
Depreciation of your vehicle also affects the amount your insurer is going to pay. If you
own a used vehicle and it is stolen, your insurer is likely to pay the car's actual cash
value instead of what it cost new.
Next: Homeowner's Insurance
Insurance
Calculators:
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• How much life insurance do
I need?
• Which is better: term or
whole life?
• What is my return on a
whole life policy?
• What is my return on a
universal policy? |
