Hello! Welcome Back! June 28th is National Insurance Awareness Day. Raise your hand if you understand all your Auto Insurance Coverages! Not very many, right? Now raise your hand if you just want peace of mind that you have coverages you need, you don't want to deal with it, just tell you what to pay each month? Honestly, I bet there were alot more hands!
Liability Coverage - This is mandantory. It is broken down into several coverages. Often referred to as "Liability Only" as a coverage option.
Bodily Injury - Iowa State Minimum is $20,000 per person/$40,000 per accident. Those scare me, especially with the prices of everything these days. This coverage is not for you, if you are at fault in an accident, this is medical coverage for the other vehicle(s). My preferred office minimum is $50,000/$100,000, but this still scares me, so my preferred is $100,000/$300,000 or higher.
Property Damage - Iowa State Minimum is $15,000. This is for anything you damage, that is not your vehicle. Such as another vehicle, a mailbox, a guard rail or even a light pole or fence. $15,000 will not go far. My preferred office minimum is $50,000, but I still don't think that is enough, so my preferred is $100,000 or higher.
Uninsured/Underinsured - (Thee most misunderstood coverage out there) Iowa State Minimum is $20,000 per person/$40,000 per accident. This coverage is for you, for bodily injury, if you are not at fault, but the other person is not insured or does not have enough insurance. This will not cover your vehicle or property damage, this is for bodily injury only. My preferred office minimum is $50,000/$100,000, my preferred is $100,000/$300,000 or higher.
Medical Coverage - This coverage is not Mandantory but often added in without hesitation. Some companies or agencies may ask you to sign a waiver if this coverage is not accepted. This is medical coverage for you or anyone in the vehicle. Minimum/Standard Coverage is $5,000 per person, but can go as high as $25,000 with most companies.
Full Coverage - Adds on the Comprehensive/Other than Collision coverage and the Collision coverage. This is not Mandantory by the state, but if you have a loan on your vehicle, they will probably require it. So let's break down these two coverages.
You will have a deductible, this means you are required to pay the selected dollar amount before insurance will cover the claim. Every company has different options ranging from no deductible to $5,000. Check with your agent. The higher the deductible, the lower the premium. Deductibles can differ vehicle to vehicle on your policy, they don't all have to have the same. A good rule of thumb, if you don't have a loan and you have the flexibility of choosing your deductibles, think this, "I would never file a claim less that $x." X should be your deductible.
Comprehensive/Other than Collision - This is for hail damage, flood, theft, vandalism, falling objects, glass/windshield and animal collisions, just to name a few. You will have a deductible for this coverage. Comprehensive claims, generally speaking, DO NOT effect your rates. However, if you are a shopper/jumper, this will effect your rates and eligibility with another carrier.
Collision - This is for collision with everything (except animals, as stated above), even the pesky curb when you slide on the ice. You will have a deductible for this as well, and it does not need to match the comprehensive coverage deductible. Using this coverage will most likely increase your rates, whether loss of claims free discount or by surcharge, discuss the reprocussions with your Agent for your specific situation. See frequently asked questions for more answers to your claims questions.
Common optional add-ons - Not available with every company.
Roadside Assistance/Towing - Every Insurance Company is different in what they offer and how they offer, contact your agent for your specific coverages. Most companies will cover, towing, either peaked out per use or by distance, flat repair, jumpstart, running out of fuel, they will pay for the service call to bring you fuel but not for the fuel itself and locksmith services. Check with your agent to see if this is available per policy or per vehicle. Companies that offer it per vehicle may require you have Full Coverage.
Rental Reimbursement - If your vehicle is in the shop, claims related, and you need a loaner, insurance may cover a portion, there are several options on coverage amounts. This is not for renting a vehicle for vacation, please see frequently asked questions for those details. This is offered on full coverage vehicles only, some companies include a minimum endorsement on your policy just for having full coverage. Not all vehicles have to have the same tier.
Glass Coverage - Not every company offers this coverage and it may look very different company to company. Some are no deductible, full glass coverage, and some are just a reduced deductible.
Thank you! If you still need more of a definition, visit my website https://snjfamily.com/insurance and scroll down to the Insurance Glossary. Want an example of coverage being used, please reach out to me, I have a story for each one.
Up Next: Frequesntly Asked Questions regarding Auto claims/usage.
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