All about auto insurance

One of the best ways to start the process of buying auto insurance is to take a few minutes to familiarize yourself with the different parts of an auto policy and the coverages available to you. Different states have different requirements for these coverages. We’ve outlined several different coverages:

• Liability Insurance
• Uninsured/Underinsured Insurance
• Medical Payments (Personal Injury Protection)
• Property Damage
• Other Available Coverages

1. Liability Insurance

   Liability insurance provides coverage for injury you cause to another individual with your vehicle. Different states require drivers to carry different limits of liability insurance coverage. Statistics show that most state minimum limits may be adequate for minor accidents, but the claims costs associated with severe accidents can quickly become financially overwhelming. This is especially important to consider if you have significant assets, such as a home, to protect. Be sure you carry adequate insurance to protect yourself from the potential financial devastation associated with a serious accident.

   If you decide to buy additional insurance or increase your policy’s protection limits, you will increase your premium. However, you will also protect your assets from claims that exceed the minimum coverage amounts. Ask your Penn National Insurance agent to recommend the right coverage limits for your specific needs.

   The two primary types of liability insurance are bodily injury liability and property damage liability.

   1. Bodily Injury Liability Insurance

      This insurance pays for damages for which the insured becomes legally responsible because of an accident. Bodily Injury coverage does not pay for property damage. Instead, if you cause an accident that includes injuries or fatalities to others, your bodily injury liability coverage can pay for covered claims such as medical expenses, lost wages, pain and suffering, and defense or legal costs. This coverage also offers the same liability coverage to family members living in your home or an individual using your car with your consent.

      Your Penn National Insurance agent can tell you the coverage required in your state.

   2. Property Damage Liability Insurance.

      This insurance pays for damage you cause to another individual’s property while driving your car. It also covers damages caused by any individual, or a family member living in your home, driving the car with your consent.

      Your Penn National Insurance agent can tell you the coverage required in your state.

2. Uninsured/Underinsured Motorist Coverage

   In some states these coverages are bundled together, and in other states these are separate coverages with different coverage options. Uninsured Motorist coverage protects you if you sustain damages in an accident caused by a driver without insurance. It also protects you if you are hit or injured by a hit-and-run motorist. Underinsured Motorist Coverage provides you with coverage for your injuries or damages in the event the driver who caused the accident does not have enough insurance to pay your claim. Your uninsured/underinsured driver coverage takes the place of insurance that the other driver should have purchased. This insurance does not protect the other driver.

   Uninsured/Underinsured motorist coverage is also offered at various limits. Your independent Penn National Insurance agent will probably recommend that you carry bodily injury limits of $100,000 per person and $300,000 per accident or at least as high as your bodily injury liability limits. Discuss this coverage with your Penn National Insurance agent and take your agent’s specific recommendation, to make sure that you are carrying the levels of coverage you need.

3. Medical Payments (Personal Injury Protection/ First Party Benefits)

   This coverage pays for reasonable expenses for necessary medical and funeral services because of injuries caused by an accident or if an insured is a pedestrian and struck by a vehicle. In states that have Personal Injury Protection or First Party Benefits, payments for loss wages is also included. This coverage is provided to the insured, family members living with the insured, and passengers in the vehicle. This coverage pays medical and funeral expense, and lost wages to you, regardless of who caused the accident. This is known as “no-fault” coverage. Talk to your Penn National Insurance agent about the specific coverages available, and how medical payment coverage coincides with coverage provided by your health insurance.

   PIP coverage is mandatory in some states, but optional in others. Your Penn National Insurance agent can tell you the coverage required in your state.

4. Property Damage

   Property damage insurance pays for damages to your car, as opposed to property damage liability coverage, which protects damage caused to other people’s property. There are two types of property damage coverage: collision and comprehensive.

   1. Collision Coverage

      Collision insurance pays to repair damage to your car when it collides with another object—such as a fence, a tree, or another car. Many banks will require you to buy this coverage to qualify for a car loan.

      Different states require different minimum deductibles for collision insurance, if you choose to carry collision insurance. You can choose to carry a higher deductible. Doing so will reduce your premium, because you are assuming more risk and the insurance company is assuming less.

      Your Penn National Insurance agent can help you choose the appropriate coverage and deductibles.

      If you have an older vehicle that is worth less than $1,500, it might make sense for you to not carry collision insurance. Based on statistics, you will probably pay more for collision insurance on an older vehicle than you would ever be reimbursed from payment of a claim. Check with your Penn National Insurance agent to see what decision is best for you.

   2. Other Than Collision Coverage

      Other Than Collision Coverage covers damage to your car from most causes other than collision, including fire, hail and other severe weather, vandalism and theft, and contact with bird or animal. Comprehensive coverage also pays for glass damage, including windshields. Comprehensive coverage is optional; but most drivers choose to carry this protection and it is often required by a lender to qualify for a car loan. Again, follow your agent’s specific recommendations.

   3. If you purchase coverage for damage to your auto, your policy may automatically provide transportation expenses. This coverage provides coverage for temporary transportation expenses you incur because of a collision or other than collision loss. These expenses can be related to renting a vehicle or taking a taxi or train to work. Transportation Expenses usually provide expense up to $15 per day, to a maximum of $450.

5. Other Available Coverages

   1. Rental Reimbursement or Increase Limits of Transportation Expenses

      If you’ve ever had to rent a car for more than a few days, you know the expense can add up quickly. If you are in an accident or your car is stolen, rental reimbursement coverage will pay for a rental car, based on the limits outlined in your policy. This coverage is generally inexpensive and can save you a bundle if you need it. Chances are you’ll never have to use it; but if you do, you’ll be glad you have it. Ask for your agent’s recommendation.

   2. Income Loss

      This will cover your wages—all or part—if you cannot work due to injuries sustained in an auto accident.

   3. Extraordinary Medical Benefits

      This coverage will pay for medical or rehabilitation expenses that exceed $100,000. There is a $1 million maximum limit for this coverage.

   4. Funeral Benefit

      This coverage will pay a set amount if you or a family member are killed in an auto accident.