Recent car accident data from Statista shows why it’s important for all drivers to have a standard auto insurance policy. According to the statistics site, there are approximately five million auto crashes that involve property damage in the U.S. every year. Also, over 34,000 people die and about 1.8 million sustain injuries in car accidents annually.
In this beneficial guide for auto insurance policyholders, you’ll learn about the various losses and damages that different standard policies cover.
In most states, auto liability insurance is mandatory for all drivers to have. This insurance can cover third-party car accident losses and damages for which you’re liable. The policy may also cover your legal fees if you’re sued for crash liabilities.
The policy provides two basic protections:
● Bodily injury: This component can cover the treatment costs, lost wages, ambulance rides, and pain or suffering incurred by the other driver or injured third-parties.
● Property damage: It may cover the costs of repairing the victim’s damaged property, such as a car or building if you’re responsible for the damage.
Personal Injury Protection (PIP)
This coverage can take care of your medical expenses when you’re liable for your own or your passengers’ car accident injuries. In this scenario, neither your auto liability coverage nor the other driver’s will compensate you for your physical injuries or other related losses.
Collision insurance helps pay to repair or replace your car if it’s damaged or completely destroyed in a crash with another vehicle. It doesn’t usually matter who’s at fault—your insurer can pay for your repair expenses. This policy protects you regardless of whether or not another car is involved in the accident.
Comprehensive insurance bundles together multiple automobile risks that are not related to a collision. Primarily, the policy can pay for the replacement of your stolen car. Its protections also include loss or damage resulting from vandalism, fire, explosion, or natural disasters like windstorm, hail, or flooding.
It’s not unusual for drivers to combine collision with comprehensive auto insurance. These policies may be mandatory in some states.
Not every motorist on the road has sufficient liability coverage. Some may not have this mandatory insurance at all. If you’re involved in an accident with an uninsured driver where it is found that the driver is liable for your injuries, your uninsured/underinsured policy will help cover any extra medical costs. The policy also covers your injuries in case of a hit-and-run motorist.
Supplemental insurance can help fill critical auto insurance coverage gaps, ensuring that you don’t spend any money out of pocket to pay for an insured loss. Gap insurance is an example of supplemental insurance. Some car loans require you to obtain gap coverage on the vehicle while you are repaying the loan.
If your loaned car is damaged beyond its depreciated value in an accident, your collision or comprehensive policy would typically pay your lender up to the depreciated figure. The difference would have to come out of your pocket unless you have gap insurance.
As you’ve seen in this auto insurance guide, it’s in your best interest to have adequate coverage as a driver or business that owns vehicles. The experts at CF&P Insurance Brokers can help assess your specific car insurance coverage needs and close any protection gaps. To learn more, don’t hesitate to call us at (925) 956-7700 today.