What auto insurance coverages do you need?

If you’re shopping for auto insurance, you’re probably wondering what you’re actually buying. Understanding the coverages in your policy is very important because making the wrong choice can cost you much more than what you’re saving. 

Auto insurance can be broken down into 3 parts

1. Coverage for other’s injuries or property damage
2. Coverage for your injuries
3. Coverage for damage to your car. 

Part 1 – Coverage for Others

 If you look at your auto policy declarations page, you will see something like this:

Bodily Injury Liability                  $100,000 per person/$300,000 per accident
Property Damage Liability          $100,000

If you cause an accident, the Bodily Injury coverage is what will pay for the other person’s medical expenses and if they sue you.  The Property Damage coverage will pay for damage to other vehicles or property.

In the State of Illinois, the minimum required limits are $25,000/$50,000/$20,000.  But if you have assets or are concerned about being sued, higher limits are available and are recommended.  The average limit is $100,000/$300,000/$100,000, however with the high cost of medical services, many people are opting even higher limits, and are adding a personal umbrella.

Part 2 – Coverage for You, Your Family Members and Your Passengers

Medical Payments coverage is relatively inexpensive coverage, and can be very useful if you or your passengers are injured.  You can purchase as little as $1,000 per person and as much as $100,000 per person depending on the insurance company.  Most people carry $5,000 coverage to pay for health insurance deductibles and co-insurance payments. 

Uninsured/Underinsured Motorist Coverage and will pay for your medical expenses if you are hit by an uninsured driver, or if they don’t have enough insurance to pay for your injuries.  You should have the same limits as your Bodily Injury Liability coverage.

Part 3 – Coverage for Your Car (Physical Damage Coverage)

Comprehensive or Other than Collision coverage pays for damage to your car caused by fire, theft, windstorm, hail, animal damage, vandalism and much more.  There is usually a deductible.  Most people have a $250 or $500 deductible.  You can also ask for Full Glass coverage which will waive the deductible if you have a broken windshield.

Collision coverage pays for damage to your car caused by a collision with a vehicle or object.  So even if your car is hit by a shopping cart, that’s a collision. Or if you damage your car running over a pothole, that’s a collision also.  There is a deductible, and most people have a $250, $500, or $1,000 deductible.  Increasing your deductible will lower your premium.

Transportation Expense coverage will pay for a rental car if your car is stolen or damaged by a covered claim.  Coverage is for while the car is disabled or in the shop for repairs.  Limits range from $20 a day to $50 a day for up to 30 days coverage.

Roadside Assistance will cover for towing expense even if it’s for a mechanical breakdown.  It will also cover a battery jump, fixing a flat, or if you lock your keys in your car.  Limits range from $50 to $100 per disablement. 

When you have all of the above coverages, it can be referred as having “full coverage.”  But if your car is older and doesn’t have much value, then you may not want to include physical damage coverage for your car.  You can check the value of your car on Kelley Blue Book.

Hopefully this article helped you with your auto insurance shopping.  If you’re in the Chicagoland area, and you’d like us to shop your insurance with our many carriers, Call Us, We Can Help! (847) 430-3342 .

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