At Shine we’re always explaining how auto, home, and business insurance works. Usually that’s one-on-one with our clients but today we’re pulling back the curtain and offering a guide to understanding auto insurance.

Here’s a basic overview:

The first step to understanding your auto insurance is knowing whether you live in an At Fault State or a No Fault State.
You can Google it or watch this video that breaks it down:

Next is to understand the coverages.

Your At Fault state auto insurance policy should cover:

Bodily Injury Liability

Liability Coverage is the most important part of your auto policy.  Why?  Well, you travel around in a huge metal bullet just inches from strangers.  Make contact and you’re their worst enemy.  Hurting other people’s bodies is much more likely in your car than your house and that’s why auto liability coverage is required by law.

Property Damage Liability

 While an accident may or may not hurt a person, it will almost always hurt whatever was hit.  When that’s someone else’s property this part of your policy covers.  “No Fault” states complicate this, but liability coverage is important no matter how your state insurance laws are set up.

 Un/Underinsured Motorist Coverage

 Some people break the law.  Others just carry to lowest possible liability limits required by law.  So when those people run into you, it’s a bummer.  Fortunately, your Un/Underinsured motorist coverage is there to protect you.

Comprehensive/Collision

This is what folks call “Full Coverage”.  Really, these two items are all about coverage for your car.  Comprehensive (sometimes called “Other than Collision”) refers to damage that is not the result of a traditional car accident.  Tree limbs falling, garage fires, and impact with an animal fit this category.  Collision is a regular old accident.  Both have deductibles that you pay before coverage kicks in.

Rental Reimbursement

Coverage for a rental while your car is being fixed.  This only applies if the damage to your car is from a covered accident.

Roadside Assistance

More and more companies are offering this service as a part of your auto insurance policy

For No Fault States, the above coverage options apply.  But you need one more thing:

 Personal Injury Protection (PIP)

Since your insurance policy pays no matter who’s fault the accident is, you need better coverage for injuries to YOU.  PIP provides that.

That’s it for this blog post but we’ve got an option to dig way deeper at www.makeinsurancesimple.com. You’ll find a FREE course on all things related to Home & Auto Insurance.

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