Riehl & Knode Insurance Agency, Inc.
Email:  fdriehl@rkinsurance.comcastbiz.net
410-239-0720 office
410-239-0724  fax

Auto Insurance Basics


AUTO INSURANCE BASICS

What is Auto Insurance?
Auto insurance is meant to protect you if you cause injuries to others or damage their property in an auto accident. It can also provide protection if your car is damaged in an accident or is stolen. What protection you have is spelled out in your auto insurance policy.

What does Auto Insurance Cover?
At a high level, auto insurance typically provides four basic things - liability coverages (for injuries to others and damage to their property), coverage for damage to your car or cars, coverage for medical expenses and uninsured motorist coverages (for situations where someone without enough insurance injures you or a family member). There are a variety of coverage options available; they may vary by state and company.

What are the Common Auto Insurance Coverages?
Below are some simplified descriptions of common auto insurance coverages. All coverages are subject to the limits, terms and conditions of the actual policy you purchase.

Bodily Injury Liability  - generally pays damages for bodily injuries to the driver and passengers of the other vehicle when you are responsible for an accident. It also provides coverage to defend you if you are sued because of an auto accident.
Property Damage Liability - generally pays for damages to another person's property (e.g. their car) when you are responsible for an accident. It also provides coverage to defend you if you are sued because of an auto accident.
Medical Payments Coverage - generally covers you, household relatives and your passengers for medical expenses that result from injuries sustained in an auto accident. It also covers you as a pedestrian if you are hit by a vehicle. Some states have personal injury protection (PIP) in place of, or in addition to, medical payments coverage. This is also known as no-fault coverage. PIP can generally pay for medical expenses, funeral expenses, loss of income and other expenses for injuries or death due to bodily injury sustained as the result of a car accident.
Uninsured or Underinsured Motorist Bodily Injury Coverage - generally pays for damages for bodily injury to you and your passengers when caused by another in an auto accident and the person legally responsible either has inadequate or no insurance.
Collision Coverage - generally pays for damage to your car if it hits another car, object, or overturns. A deductible applies to this coverage.
Comprehensive Coverage - generally pays for damage to your car if it is stolen or damaged by certain causes other than collision, such as fire, theft, hail or vandalism. A deductible applies to this coverage.

What Should I Consider When Purchasing Auto Insurance?
When purchasing auto insurance, make sure you find coverage that fits your needs. Think about you and your family's specific circumstances, including your risk tolerance and your budget. Below are a few simple questions to help you star evaluating your needs:

  - What is my household salary? What are my assets? How much in savings and equity do I have? Generally, the higher your salary and net worth, the more you stand to lose if you are ever found liable for an accident. The more assets you have, the more coverage you should consider.
-  How old is my car and how much is it worth? Do I own my car outright or is it leased/financed?
How much am I willing to pay out of pocket? (Deductible)
Do I have health insurance? Auto insurance can include medical payments coverage. If you don't      have your own health insurance, you should consider purchasing this type of protection.