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Basic Auto Insurance Coverages

Required Coverages

  • Bodily Injury Liability (10,000 per person/20,000 per accident) — This covers costs associated with injuries and death that you or another driver causes while driving your car.

  • Property Damage Liability (10,000)— This coverage will reimburse others for damage that you or another driver operating your car causes to another vehicle or other property, such as a fence, building or utility pole.

  • Personal Injury Protection (10,000)— insurance that pays your for personal injuries that you suffer in a car crash. When you have PIP insurance, it pays you for your injuries even if you are proven to be at fault for the accident. PIP insurance covers losses that include medical bills and lost wages if you are unable to work. If you need replacement services, you can use the funds to hire someone to do household chores, provide child care or drive. PIP coverage pays 80 percent of medical bills incurred because of the crash up to the policy limit. It pays 60 percent of lost wages if the injured individual cannot work. If a person needs replacement services, PIP coverage pays 100 percent for these losses. Finally, if a death occurs, PIP coverage offers compensation of up to $5,000.

Recommended Coverages

  • Uninsured Motorist Coverage — Reimburses you when an accident is caused by an uninsured motorist—or in the case of a hit-and-run. Also included is, under insured motorist coverage, which will cover costs when another driver lacks adequate coverage to pay the costs of a serious accident.

  • Medical Payments — Provides reimbursement for medical expenses for injuries to you or your passengers. It will also cover lost wages and other related expenses.

Optional Coverages

While basic, legally mandated auto insurance covers the cost of damages to other vehicles that you cause while driving, it does not cover damage to your own car. To cover this, you need to purchase the following optional auto insurance coverages:

  • Collision — This optional coverage reimburses you for damage to your car that occurs as a result of a collision with another vehicle or other object—e.g., a tree or guardrail—when you’re at fault. While collision coverage will not reimburse you for mechanical failure or normal wear-and-tear on your car, it will cover damage from potholes or from rolling your car.

  • Comprehensive — This provides coverage against theft and damage caused by an incident other than a collision, such as fire, flood, vandalism, hail, falling rocks or trees and other hazards—even getting hit by an asteroid!

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