You probably know the associations that come to mind while you pronounce certain words. When you say "earth", the next thing that pops up in your head is "wind", then "air" and "fire". When we describe hip-hop, we use such terms as "DJ, scratch, break and graff". But what can we say about the insurances? How about: "Liability, medical expenses, uninsured driver and the car damage"? You can't really state that those four words suit the insurance description better than those of a hop-hop but still... Maybe the world would take a notice and pay its attention to the problem of insurances more if it was broadcasted on TV as a show where the "insurance freestyles" would be explained more precisely to each and every one. Read also: What is better for you - liability or the full coverage?
Let's now take a look at those four components and discuss them as they are:
First one is - Liability
What is the car coverage without liability? Nothing. Liability coverage is a wonderful escape from lawsuits and those hurt in the accident. Here is a good example. You ran a wrong light and hit an old woman in a Mercedes, in such case your liability coverage will take care of the most of the situation and pay for the woman's injuries as well as the damage done to her car.
But don't get it wrong. There is a limit to everything. The liability coverage has its limits too. Those are called "split limits". What is usually means is that there are two types of coverage - bodily injury coverage and property damage coverage. There are limits set on both of them. For example, you could have liability coverage with a bodily injury limit of $100,000 / $300,000; and a property damage limit of $50,000. The first sum is the payment for each person to the maximum, and the $300.000 is the sum payment for each accident. The property damage limit refers to each single accident that took place. If this old woman had a few friends with her and all of them suffered damages worth $ 150.000- your insurance company will pay $100.000 out of those and you will pay the rest. This is how it works. Read also: The first steps after a car accident.
The second point to discuss is definitely: Medical Expenses Coverage
Medical expenses coverage is the coverage for you. What this coverage does is pays medical, surgical, ambulance, hospital, nursing, and funeral expenses, up to a specified limit. Unlike the liability coverage this one is more concerned about you than other people. This coverage also helps you to protect the members of your family and those who are insured.
The third part of the insurance is called - Uninsured Driver
This coverage insures you against those people that have no insurance on the road. Let's view the same old example but take a look at it from a different angle. If that old woman was the reason for the accident and you had to find out she was totally uninsured living on her Social Security, in such case it would take a UMC - Uninsured Motorist Coverage to solve the situation and collect damages from your own insurance. This Motorist Coverage also protects you from those who are to blame for an accident and run away from the accident spot. If such case occurs, who can you hold responsible? Nobody. That is when UMC comes into place.
The last but definitely not the least comes - Car Damage
Car Damage Coverage protects you against your car's damages. There are two types of the coverage knows - first one is Collision Coverage and the second one is - Other -than - collision coverage, also known as "OTC". Collision coverage saves you from collisions while the OTC covers loss due to fire, theft, explosion, earthquake, flood, vandalism, and animal accidents. Read also: Things that people need to do for negotiating the value for their cars.
The Summary of everything said - Shop around more than you think you need to!
Very few people realize how important the car insurance actually is. More of us view it as something we have to have by law. It is a good financial product. Before you start analyzing your car insurance deal, please answer the following question - is it the best value of your money? Are you sure you need it for the right reasons? It should be understood in the correct way.
We will not advice you to go and get your insurance right now if you are still uninsured, but we want the thought of having it to hit your head. Not having an insurance is bad nowadays but having too much of it isn't better. In order to make a good decision you need to shop around, compare your prices and possibilities. You should write down the types of coverage that make the most sense to you. Remember that a little more fuss about it now will save you much trouble later on!