Automobile Insurance from MetLife #state #insurance

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Auto Insurance: An Introduction

Driving is a privilege, but it comes with a price. There’s the cost to purchase a vehicle, maintenance, repairs, fuel, and, of course. when you buy auto insurance you’re paying for more than the replacement or repair of your vehicle after an accident. You’re buying a financial safety net—protection against financial losses that might otherwise be staggering.

When you buy an auto policy, you put together a “package” of insurance from standard types of coverage—a package that can protect you, your family, your vehicle, and your assets, subject to policy terms and conditions. Note that many states require at least a specific minimum amount of insurance. Before you can determine the specific insurance coverage that’s right for you, you need to become familiar with the standard types of offered. They include:

  • Bodily injury liability
  • Property damage liability
  • Collision coverage
  • Comprehensive coverage
  • Medical payments coverage
  • Uninsured/Underinsured motorists protection
What Is Liability Insurance?

If you are judged to be legally liable for an accident, you can be sued for the full cost of the damages, including property damage; hospital and medical payments; rehabilitative care; lost income; and even the pain and suffering of injured people. Liability insurance helps protect you from the financial impact of these costs. If the total of a given loss exceeded the amount of your liability insurance, however, you may have to pay the rest out of your own pocket. Since liability coverage protects your assets in this way, you can see why you need to consider buying more liability coverage than the minimum required by your state.

Note that almost all states require basic liability coverage. The Insurance Information Institute (III) provides a state-by-state listing of minimum limits for auto liability insurance on the Internet at: www.iii.org. See For More Information below. Remember, your state’s requirement is a minimum—it’s up to you to determine how much insurance you really need.

Two types of liability insurance are offered:

Bodily injury liability protects you in the event it’s determined you are responsible for an accident in which someone were is injured or killed.

Property damage liability covers the damage your vehicle causes to someone else’s property, such as his or her car, or a fence on his or her land. Auto insurance policies usually describe the amount of liability coverage in a series of three numbers, called Split Limits.

Suppose your coverage read: “50,000/100,000/25,000”

The first number, $50,000, is the maximum the insurance company would pay for bodily injury to any one person in an accident.

The second number, $100,000, is the maximum amount the insurance company would pay for bodily injury for a single accident. no matter how many people are injured.

The last number, $25,000, is the maximum amount the policy covers for damage to someone else’s property.

Bodily injury and property damage liability may also be shown as a combined single limit (CSL). The combined single limit (CSL) number is the maximum dollar coverage (e.g. $100,000) for bodily injury and property damage combined, no matter how many people are involved or the amount of property damage. Note that all limits are per accident .

Many states require drivers to carry a minimum amount of liability insurance, approximately 20,000/40,000/10,000. That means $20,000 to cover injuries to any one person, $40,000 total for all injuries, and $10,000 for property damage.

Collision and Comprehensive Insurance

Collision insurance pays for damage to your car that results from colliding with another vehicle or object, or from a vehicle rollover. Your car is covered no matter who caused the accident.

Comprehensive coverage pays for damage to your car caused by something other than a collision. This includes theft, vandalism, collision with animals, and disasters such as fire, flood, and hail. Collision and comprehensive insurance usually do not pay for the entire loss.

For the entire loss; typically, there is a deductible. A deductible is a specific amount you must pay out of your own pocket, before receiving money from the insurance company. In other words, the insurance company “deducts” the deductible amount from any settlement. This means that if you had a $1,000 loss and your deductible were $250, the insurance company would pay you the difference between the loss amount and your deductible, which would be $750 in this example.

You select a deductible amount—usually between $250 and $1,000 — when you purchase the insurance. Bear in mind that higher deductibles mean lower premiums, since the insurance company would be responsible for paying you less in the event of an accident..

Depreciation also affects the amount you can recover. As your car ages, its value declines—or depreciates—and the amount you can collect for a total loss declines as well. If your car were a total loss, the insurance company would reimburse you for the actual cash value (ACV) of your car minus the deductible. The ACV is what it would cost to replace your car with one in the same, or similar, condition. Age of the vehicle, mileage, previous damage, and general wear and tear are all factors when determining the actual cash value.

Sometimes it doesn’t make financial sense to pay for collision and comprehensive insurance. If you had an old car or one in poor condition, you may find that collision coverage would pay only a small dollar amount in the event of a major accident, while eliminating it could mean significant savings. When deciding whether or not collision coverage is appropriate for your specific situation, consider:

Is your car paid for, or do you make car payments? If you owe money on your car, on your car, you’d have to pay it off, even if the car were totaled.  If you had collision coverage you could use the money to pay off the loan.

How much does collision and comprehensive coverage cost for your car?

What is your deductible amount?

What is the amount you would receive if your car were “totaled”? (i.e., the actual cash value minus the deductible.)

In the end, only you can decide whether the cost of insurance is more economical than the cost of repairing or replacing the car at your own expense.

Medical Payments and Personal Injury Protection Insurances

Medical payments insurance covers the cost of doctors, hospitals, and funeral expenses, for you and/or your passengers that result from an accident, regardless of who were at fault. The coverage would also protect you when you drive another person’s car (with permission) or if a vehicle struck you or family members, as pedestrians. This coverage is relatively inexpensive. Although it varies by state, coverage is generally available with limits between $1,000 and $100,000.

Personal injury protection (PIP) is a form of insurance coverage that may be required in states with no-fault laws. This coverage is a broader form of medical payments insurance. It pays for medical care, and may also pay for lost wages and replacement services for an injured party (for example, paying for a babysitter to look after children while a parent is hospitalized). Personal injury protection pays regardless of who was at fault in an accident.

States with no-fault laws may limit the right to sue for nonmonetary damages, such as pain and suffering, but you may still be able to sue in cases of incapacitating disability or death. This coverage varies by state, and is sometimes an optional offering in states without no-fault laws. When evaluating this coverage, remember that medical payments insurance and PIP also protect your passengers.

Before considering medical payments or personal injury protection coverage, check with your insurance agent, attorney, or state insurance department for details.

Uninsured/Underinsured Motorists Protection

If you were involved in an accident with an uninsured driver, it would probably be difficult to collect damages from the responsible party. Uninsured motorists (UM) coverage pays the cost of damages and injuries resulting from being hit by an uninsured driver or by a hit-and-run driver. It also provides coverage if an uninsured driver struck you or family members as pedestrians. UM would cover you and your passengers for medical expenses, lost wages, and other injury-related losses, subject to policy terms and conditions. You may also be able to collect for pain and suffering.

Similarly, underinsured motorists (UIM) coverage would pay for damages that exceed the amount of coverage carried by an underinsured driver.

You choose the amount of coverage when you buy this protection. Keep in mind that both uninsured and underinsured motorists insurance requirements vary by state.





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