Comprehensive insurance allows auto owners to repair their vehicles when damaged from weather or natural damage and vandalism. Comprehensive insurance is one of the most used aspects of an auto policy. There are three major benefits that come from having comprehensive insurance.
- Major Peril Benefits: When it comes time to file a claim. Theft, fire damage, storm damage, and many others are covered by this coverage.
- Glass and Rental Car Benefits: Some people do not realize that some comprehensive coverage will cover a rental car. This benefit gives a driver a rental car just in case theirs is being fixed. Sometimes if you get a rental car for vacation or a trip, Your insurance covers this rental too. Always check with your agent to make sure you insurance covers a rental car in the event it is damaged. Some people are also amazed to find out that even though glass coverage is not listed on their policy it still is covered under comprehensive coverage.
- Loan Benefit: Most lenders want some kind of physical damage coverage to be on the vehicle. Comprehensive coverage satisfies this requirement making it possible to get the loan.
- Benefit of Peace of Mind: The newer the car the more concern there is from the owner about damage. Comprehensive insurance gives peace of mind that there is an option to have the vehicle fixed should the need arise from a defined peril in the coverage definitions.
Every person has asked a question about what the best coverages to carry on an auto policy is. Some people feel that the minimum coverage amounts are all that is needed and others feel that the highest coverage’s are the best.
How do the limits of liability work?
The limits of liability are set coverage amounts that are picked by the policy owner when they purchase the policy from an insurance agent. Suppose a policy owner buys a policy with limits of liability set at 25/50/25. The policy will pay out $25,000 per person, $50,000 per accident, and $25,000 for property damage.
How many different levels of liability are there?
The different limits of liability are usually set and agreed upon by the insurance commission and the insurance company. The typical liability limits are 25/50/25, 50/100/50, 100/300/50, and 250/500/100. There are also different levels for property damage. It can be as low as $25,000 and as high as $100,000.
Why are there different levels of liability?
There are different levels of liability so the consumer has a choice in the level of protection they want to have on their insurance.
What is the best level of liability coverage to have?
Limits of liability are to be chosen for protection against the possibility of a life changing accident. Some people carry the minimum limits and they are satisfied with those levels. One thing to think about is the cost of repair to a person’s car and possible medical bills in the not-at-fault party is hurt. Most insurance agents will claim that the higher limits of liability are better. If the amount of insurance is not enough to pay for the entire accident, the suffering party can sue for unpaid damages. Any unpaid bills will come out of the at-fault party’s pocket. Insurance agents will usually recommend 100/300/100 or 250/500/100. It is best to consult an insurance agent for a fuller understanding.
Liability insurance is the coverage of an auto policy that protects a person in the event of an at-fault accident. When a person has hit another person’s car they are liable under the law to fully rectify and pay for all damages to the person’s property and any medical bills that are directly related to the accident. Insurance is a means that allows the at-fault party to pay for their responsibility to the other person.
Liability insurance amounts are usually listed as 100/300/100. This means that the policy will pay up to $100,000 per person for a total of $300,000 per accident and the policy will pay up to $100,000 for all property damage. The hidden cost of liability insurance is not the cost of carrying such coverage’s but rather the cost to you if your insurance is not enough to pay for the damages to the other party.
Suppose for a moment that a policy has limits of 15/30/10 and there is an accident that totals the car and puts the driver in the hospital for a week. The limits of liability will pay $15,000 per person up to a maximum of $30,000 for the accident. If the person’s hospital bill comes out to be $100,000, the at-fault party will have to come up with the difference from what the insurance policy paid and what is left to satisfy the hospital bill. That leaves $70,000 that you will have to pay out of pocket. In most cases the at-fault party will end up being sued and forced to pay the remainder of the balance. This will destroy their financial status for years to come.