Auto Insurance

Auto insurance is more than just a legal requirement—it’s a crucial financial safeguard. While state laws mandate minimum liability coverage, those limits often fall short of covering the full costs of an accident. The right auto insurance policy can provide better protection for you, your passengers, and your vehicle, ensuring you're not left with significant out-of-pocket expenses after a loss. Whether it’s liability coverage, protection from uninsured drivers, or coverage for your own vehicle, having the right policy in place can offer peace of mind and financial security.

 

Coverage A – Liability Insurance

Liability insurance is required in most states and covers damages a covered driver is legally responsible for in an accident. It includes:

• Bodily Injury Liability (BI) – Pays for medical expenses, lost wages, and legal fees if the covered driver causes injury to others.

• Property Damage Liability (PD) – Covers repairs or replacement of another person’s vehicle or property damaged in an accident.

 

Liability limits are typically expressed in one of two ways:

• Split Limit Liability – Represented as three numbers (e.g., 250k/500k/100k), which indicate coverage per person, per accident, and for property damage. This structure allows covered drivers to have set amounts allocated for different types of losses.

• Combined Single Limit (CSL) – Provides a single total amount that can be applied to both bodily injury and property damage claims, offering greater flexibility in how funds are used after an accident.

 

While split limit policies may offer structured coverage, CSL policies provide broader protection, particularly in cases where one type of damage (bodily injury or property damage) is significantly higher than the other.

 

Coverage B – Medical Payments (MedPay) / Personal Injury Protection (PIP)

Medical payments coverage (MedPay) and Personal Injury Protection (PIP) help cover medical expenses for the covered driver and passengers, regardless of fault.

• MedPay covers hospital visits, surgery, and funeral expenses up to the policy limit.

• PIP (required in no-fault states) extends coverage to lost wages, rehabilitation, and essential services such as childcare if the insured is unable to work due to injuries.

 

Coverage C – Uninsured/Underinsured Motorist Coverage

This coverage protects against drivers who have little or no insurance. It includes:

• Uninsured Motorist (UM) – Covers injuries and damages when an at-fault driver lacks insurance.

• Underinsured Motorist (UIM) – Provides additional coverage when the at-fault driver’s insurance is insufficient to cover damages.

UM/UIM coverage helps avoid out-of-pocket costs in accidents involving uninsured drivers.

 

Coverage D – Physical Damage to Your Auto

Physical damage coverage protects the insured vehicle from various risks. It includes:

• Comprehensive (Other Than Collision) Coverage – Pays for damage from theft, vandalism, fire, flood, falling objects, and animal collisions.

• Collision Coverage – Covers repairs or replacement if the vehicle is damaged in an accident, regardless of fault.

 

Most policies provide actual cash value (ACV) coverage, which equals the fair market value of your vehicle at the time of loss. This valuation considers factory-installed features, depreciation for mileage, and overall condition.

 

For certain vehicles, such as classic, collector, or specialty cars, other valuation methods may be available:

• Stated Value Coverage – The insured selects a coverage amount based on an agreed estimate of the car’s value. However, in a claim, the payout may be based on the lesser of the stated value or ACV.

• Guaranteed Value Coverage – The insurer and covered driver agree on a set value for the vehicle, and in the event of a total loss, the full amount is paid without depreciation deductions. This option is typically used for high-value or collectible vehicles where the value is well-documented and agreed upon upfront.

 

Optional Add-Ons

• OEM (Original Equipment Manufacturer) Coverage – Ensures repairs use manufacturer-made parts instead of aftermarket parts.

• Full Glass Coverage – Covers windshield and window replacement without a deductible.

• Rental reimbursement covers the cost of a temporary rental car while the insured vehicle is being repaired after a covered claim. This can be particularly valuable for those who rely on their vehicle for work or daily activities.

• Roadside Assistance: Many insurers offer optional roadside assistance, which provides emergency services such as: Towing, Battery jump-starts, Flat tire changes, Lockout services. This coverage can help covered drivers avoid costly out-of-pocket expenses in case of minor vehicle issues.

 

Discounts and Ways to Save

Auto insurance premiums vary based on factors such as driving history, vehicle type, and location. Common ways to reduce costs include:

• Bundling Policies – Combining auto and home insurance with the same provider.

• Good Driver Discounts – Maintaining a clean driving record.

• Multi-Vehicle Discounts – Insuring multiple vehicles under the same policy.

• Safety Features Discounts – Installing anti-theft devices, airbags, and other safety features.

 

Telematics Programs

Many insurers offer telematics programs, which track driving habits through a mobile app or a plug-in device. Safe drivers can earn discounts based on factors like speed, braking, and mileage.

Keeping Coverage Up to Date

 

Auto insurance needs can change over time due to new vehicles, lifestyle changes, or state requirements. Regularly reviewing coverage options with an insurance agent ensures the best protection at the most competitive rates. Contact one of our licensed, independent insurance agents at Aspire Insurance Agency today!