Insurance policies are filled with legal jargon and can be confusing, but it is important to know what is covered in your insurance plan. Understanding the different coverages and which specific ones you have make the claims process much smoother. Aspects like whether you have towing and car rental covered in your plan are good to know prior to being in an accident, but understanding the options is useful when shopping for new policies too.
Know Your Policy
The declarations page, which is the first page of any policy, states which coverages you are signed up for, the cost of each and dates of coverage period. It will have your policy number and personal contact information as well as any additional drivers on the policy.
Understanding Coverages
To start, you will want to understand the different types of coverage available. Know what is covered, what is not, and what is optional.
Mandatory Coverage
The following coverages are mandatory in most states.
- Bodily Injury Liability covers the costs dues to injuries or death caused by yourself or another driver on the policy while driving your car
- Property Damage Liability reimburses others for damage to property such as fences, light posts, mail boxes, etc.
Commonly Required Coverage
- Personal Injury Protection (PIP) will reimburse for medical expenses for you and any of your passengers as well as lost wages and other related expenses
- Uninsured and Underinsured Motorist Coverages reimburse you if the accident is caused by someone without insurance or in the event of a hit and run incident, or if the other driver does not have sufficient coverage for the costs of a more serious accident.
Optional Coverage
The following coverages are optional in most states:
- Collision coverage will reimburse when you’re at fault for damages caused by another vehicle or an outside object such as a guard rail or tree, or even potholes.
- Comprehensive coverage is for incidents other than collisions, such as a flood, vandalism, fire, or environmental hazards like hale.
- Glass Coverage is exactly that; it covers windshields as well as side and rear windows and sunroofs
- Gap insurance is for leased or financed vehicles and pays the difference between the value of your vehicle and what is owed on it. Leases will often include gap insurance in the payments, otherwise you could end up still having to make payments on a vehicle that is no longer on the road.
