Insurance 101

What You Need To Know

Young Driver Insurance - Everyone that has automobile insurance spends a significant amount of money each month/semi-annual/yearly period out of their budget. If you think that insurance is just a "Necessary Evil" then you probably feel like that money is wasted. In your mind you probably think it would be better spent on something "much more important".

The goal of this page is to give you a very basic understanding of what is on your declaration (limits of coverage) page and why you absolutely need to actively consider what it does for you. A much more detailed description is available in the book under Goal #3. You may also wish to consider a Teenage Driver Contract, again, see the How's My Driving book.

What follows is NOT meant to replace a policy specific review with your personal agent. Your insurance premiums entitle that review to you so take advantage of it often - at least yearly. Additional features may be available depending on the state you are insured in. Always check with your agent if you have ANY questions regarding the specifics of your coverage. (This is often difficult with any company whose phone number begins with 1-800!)

Bodily Injury Liability - The amount of money that your insurance company may provide on your behalf if you have an accident that is your fault and people are injured or killed resulting in a law suit.

Property Damage Liability - The amount of money that your insurance company may provide on your behalf if you have an accident that is your fault and damage another person's property (usually this is to fix their car).

Uninsured/Under-insured Bodily injury Liability - The amount of money that your insurance company can make available to you if you have an accident that is NOT your fault and the other party has little or no Bodily Injury Liability and may not have enough assets to file suit against.

Medical Payments - the amount of money your insurance company can make available to cover traffic accident related medical bills.

Collision Insurance - the amount of money your insurance company may make available to repair your vehicle after a collision event to fix your car when no other coverage is available. Up to the Actual Cash Value ("Book") of your vehicle may be paid after you have contributed your deductible amount.

Comprehensive Insurance (Sometimes called Other than Collision) - the amount of money your insurance company may make available to repair your vehicle after any other event (fire, theft, vandalism, etc.) except a collision to fix your car when no other coverage is available. The same limit for coverage ("Book") and deductibles applies as for collision.

Rental Reimbursement - the amount of money your insurance company will make available toward a rental car each day one is needed after an accident. This amount may be listed in dollars/day or as a percentage of the car rental fee.

Towing and Labor - the amount of money your insurance company will make available for towing and/or roadside assistance. This is often done on a reimbursement basis.

Personal Injury Protection - the amount of money your insurance company will make available to cover medical costs, loss of wages, loss of services or funeral expenses regardless of who is at fault. This coverage is not available in all states (as such) and should be checked locally to find out how it is administered if it is available. This is often call No-Fault Insurance.

IGNORANCE OF YOUR POLICY DETAILS AND LIMITS AFTER AN ACCIDENT, WILL NOT CHANGE WHAT YOUR INSURANCE COMPANY WILL SPEND TO COVER YOU.

PLEASE MAKE SURE YOU UNDERSTAND YOUR AUTOMOBILE COVERAGE -- NOW!!!