Auto insurance is a contract that protects your financial security in case of an accident. Although it is not mandated by federal law, the purchase of auto insurance is usually a requirement in most states. Regardless of the law, having good Virginia auto insurance is practical for the driver who wishes to avoid lawsuits or immense repair bills.
According to the Insurance Information Institute (III), a basic auto insurance policy is comprised of six basic types of coverage. While some of these types of coverage are required by state law, some are considered optional.
These are: 1. Bodily injury liability 2. Property damage liability 3. Medical payments or Personal Injury Protection (PIP) 4. Collision 5. Comprehensive
6. Uninsured/Underinsured motorists coverage Liability Insurance
Bodily Injury Liability Insurance
Liability coverage is the foundation of any car insurance policy, and is required in most states. If you are at fault in an accident, your liability insurance will pay for the bodily injury and property damage expenses caused to others in the accident, including your legal bills. Bodily-injury coverage pays for medical bills and lost wages.
Property Damage Liability Insurance
Property-damage coverage pays for the repair or replacement of things damaged other than your own car. The other party may also decide to sue you to collect “pain and suffering” damages.
Liability insurance (both bodily injury and property damage) is the foundation of most auto insurance policies. Almost every state that requires auto insurance mandates the purchase of property damage liability. If you are at fault in an auto accident, your liability coverage will pay all the expenses, bodily injury, property damage, and any legal bills. The bodily injury coverage would pay for medical bills and lost wages; the property damage coverage would pay for any auto repairs, or replacement. Property damage liability usually repairs damage to other vehicles, but can also cover damages to things such as lamp poles, fences, buildings, or anything else that your car may have struck.
Remember, although purchasing only the minimum can get you a cheap auto insurance rate, if you cause a serious accident, minimum insurance may not cover you adequately. That’s why it’s a good idea to buy more than what your state requires. If you own a home and have nest egg and a savings account, you should consider more liability insurance because, in most states, drivers are allowed to sue other drivers who injure them in car accidents. If you’re sued and your liability insurance doesn’t pay for all of the damages, your personal finances are on the hook, and it’s likely you’ll become a target.
Collision and Comprehensive Coverages.
If you cause an accident, collision coverage will pay to repair your vehicle. You usually can’t collect any more than the actual cash value of your car, which is not the same as the car’s replacement cost. Collision coverage is normally the most expensive component of your car insurance rate. By choosing a higher deductible, say $500 or $1,000, you can keep your premium costs down. However, keep in mind that you must pay the amount of your deductible before the insurance company kicks in any money after an accident.
Insurance companies often will “total” your car if the repair costs exceed a certain percentage of the car’s worth. The critical damage point varies from company to company, from 55 percent to 90 percent.
Comprehensive coverage will pay for damages to your car that weren’t caused by an auto accident: Damages from theft, fire, vandalism, natural disasters, or hitting a deer all qualify. Comprehensive coverage also comes with a deductible and your insurer will only pay as much as the car was worth when it got wrecked.
Because insurance companies normally will not pay you more than your car’s book value, it’s helpful if you have a rough idea of this amount. Check the Kelley Blue Book or the National Automobile Dealers Association. If your car is worth less than what you’re paying for the coverage, you’re better off not having it.
Neither collision nor comprehension insurance is required by any of the states, but some lenders, when the owner finances the car, may require the purchase of collision and comprehensive in the loan agreement. Even when it is not required, collision and comprehensive coverage is highly recommended by the insurance industry, so that in the unforeseen event of damage or theft, the owner of the car can avoid heavy bills. Theft of cars is not as unusual as some people may think. In 2004, a car was stolen in the United States every 26 seconds, and a car had a 1 in 190 chance of being stolen.
Medical Payments, PIP, and No-fault coverages.
Medical Payments (MedPay) Coverage
Medical payments (MedPay) coverage will pay for your and your passengers’ medical expenses after an accident. These expenses can arise from accidents while you’re driving your car, someone else’s car (with their permission), and injuries you or your family members incur when you’re pedestrians. The coverage will pay regardless of who is at fault, but if someone else is liable, your insurer may seek to recoup the expenses from him or her.
Personal Injury Protection (PIP)
Personal Injury Protection (PIP) coverage is an extended form of MedPay. PIP may cover expenses that are related to injury, but not necessarily medical, such as lost wages, childcare and funeral costs. PIP coverage is currently required by sixteen states. If you are already insured under a good health insurance policy, then fortunately, there is no need to buy more than the minimum required amount of PIP or MedPay insurance. If you have a good health insurance plan, there might be little need to buy more than the minimum required PIP or MedPay coverages, if at all. And, if you already have disability insurance, there’s little reason to purchase higher-than-minimum amounts of PIP.
Uninsured Motorists (UM) Coverage
Uninsured motorists (UM) coverage pays for your injuries if you’re struck by a hit-and-run driver or someone who doesn’t have auto insurance. It is required in many states.
Underinsured Motorists (UIM) Coverage
Underinsured motorists (UIM) coverage will pay out if the driver who hit you causes more damage than his or her liability coverage can cover. In some states, UM or UIM coverage will also pay for property damages. Similarly, underinsured motorists insurance will cover any damage caused when you are struck by a driver who is not insured for a sufficient amount.
You’ll probably want to have at least the minimal amount of UM/UIM because if you can’t find the other driver, you’ll at least have some coverage for pain-and-suffering damages.
Several supplemental auto coverages are available, either as separate premium items or included in augmented policies. Rental reimbursement, a common add-on, covers vehicle rentals required because your car is damaged or stolen. -Coverage for towing and labor charges in case of a road breakdown is also common. -Gap coverage for your new car will pay the difference between the actual cash value you receive for the car and the amount left on your car loan if your vehicle is totaled in an accident.
Important Points about Virginia Auto Insurance Coverage
You may be asked for proof of insurance at any and all of these times: at vehicle registration, at the time of an accident, and any time when driving the vehicle. It is suggested that the owner of the car keeps proof of insurance in the car at all times, instead of on his or her person, so that it can be available at all times, no matter who is driving.
You should never drive without Virginia auto insurance. Any violations of state law regarding auto insurance could result in a hefty fine, suspension of your driver’s license, and possibly time in jail. The dire consequences of driving while uninsured are not worth the neglect of paying for insurance. The chance that an uninsured driver will avoid detection is slim; he is likely to be caught and strictly punished–not to mention and increase in the cost of insurance for 3 to 5 years.
The Insurance Advisor, LLC is a full service Independent Insurance Agency that represents many top-rated companies. We assess risks and shop companies to find the best Virginia auto insurance coverage for the price. Our clients get the best value for the insurance they need.
A few of the companies we represent include: Travelers, Safeco, Main Street, Metropolitan, Mercury, Lincoln Financial, Dairyland, Titan, Victoria, Foremost, Arrowhead, Alfa Vision, CNA, Zurich, Kemper, Augusta Mutual, Anthem, Mutual of Omaha, and many more.
Call, request a quote by email, or visit us at our office today for a free, no obligation risk assessment and quote. Let us do the research and find the best value for the Virginia Auto Insurance you need.