The 6 parts to your personal car insurance policy

The recent increase in car insurance premiums is encouraging many drivers to comparison shop online for coverage. Comparison shopping is essential, but drivers should understand the basics of auto insurance policy before trying to shop around for coverage alone. Although policies vary from insurer to insurer, the basics of the policy are generally the same and are divided into sections A through F.

Part A — Liability coverage

Most states require drivers to purchase and maintain minimum levels of liability insurance. This is the amount your insurer will pay to cover damages you cause to others. This is usually represented as numbers separated by slashes, for example 15/30/25 in Louisiana. This states that the minimum coverage you must have in Louisiana must cover up to $15,000 for bodily injury to one person in an accident, up to $30,000 total for bodily injury to everyone else in an accident, and $25,000 for property damage in an accident. Given that these minimum amounts vary from state to state, your auto coverage automatically “steps up” to the minimum level of the state you’re driving in as long as you carry the minimum coverage in your home state.

Part B — Medical Payments Coverage

While liability coverage pays parties other than the insured, medical payments will cover bodily injuries to you and the passengers in your vehicle when you are involved in an accident. Policy limits will state the maximum amount your insurance will pay.

Part C — Uninsured motorist coverage

Unfortunately, while we may be responsible in purchasing and maintaining adequate coverage, others may not be so inclined to do the same. Uninsured motorist coverage will cover you if another driver causes you bodily injury during an accident and they don’t carry adequate liability insurance. This coverage also pays for injuries sustained in a hit-and-run accident.

Part D – Cover for damage to your car

Comprehensive coverage pays for damage to your vehicle for a number of named perils, such as fire, hail, flood and theft. Collision coverage pays for damage to your vehicle due to impact with another vehicle or object. These coverages are not required by law, but are important to protect your valuable property. Failure to maintain adequate Part D coverage can be costly. However, it will likely be required by any lender or lien on your vehicle.

Part E — Obligations after accident or loss

For your coverage to be effective, you are required to notify the insurer immediately after a loss, cooperate with any investigation, notify the police in the event of a hit and run, and take reasonable steps to protect your vehicle from further damage after loss. Failure to do so may prevent you from collecting the amount from your insurer.

Part F — General Provisions

Finally, Part F discusses general policy provisions, such as how coverage can be canceled if you fail to pay your premium after a grace period.

An agent can help

Keep in mind that a licensed independent insurance agent can help you compare because they have the ability to sell policies to many insurers. Make sure you do any comparison shopping on an apples-to-apples basis. Keep in mind that minimum liability coverage requirements are often inadequate and can leave you on the hook for significant payments to others in the event you cause more damage in an accident than your policy will pay. An agent can advise you on the appropriate amount of coverage to purchase and more.

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