WHAT YOU SHOULD KNOW ABOUT YOUR FIRST AUTO INSURANCE POLICY

Buying your first car is an important milestone. The independence that comes with having your own wheelset is a great privilege. At the same time, owning a car means you have an important decision to make: what coverages do you need in your first «on your own» car insurance policy?

When you drive with quality coverage, you drive with ease. Allstate auto insurance can help you stay protected wherever the road takes you.

It is tempting to ask your agent for the least expensive policy. After all, you have a lot of other expenses to cover now that you own a car. However, once you fully understand what each part of your car policy covers, you can decide that cheaper isn’t necessarily better. Think about it: If your car was totaled in an accident, or if you seriously injured someone, a few extra dollars of insurance coverage per month could be money well spent.

These are some of the common coverages to consider for your auto policy.

COVERAGE THAT HELPS PAY THE DAMAGE IT CAUSES

 

There are two types of liability coverage. Both are required by law in most states.

• Liability for bodily injury:
  If someone is injured as a result of a car accident you caused, this coverage could help them pay their legal fees, as well as the person’s medical bills and lost wages. This coverage often includes two separate limits: one that applies to each injured person ($ 50,000, for example) and a second that applies to each accident (for example, $ 100,000).
• Liability for property damage:
  If you damage someone else’s property, such as a fence or garage door, with your vehicle, this coverage can help protect you. Property damage coverage can help reimburse the other party for their losses, so you don’t have to pay for them yourself.

COVERAGE THAT HELPS PROTECT YOU IF YOU ARE INJURED

Protection against personal injury (PIP):
If you are injured in a car accident, this coverage can help you pay your health insurance deductible (if you have one), as well as medical costs that exceed your health insurance limits. This coverage can also help you pay for your lost wages and «loss of services,» such as picking up your children from school, while you recover. In the worst case scenario: PIP can help you cover your funeral expenses. Please note that PIP is not available in all states.
Medical payments:
Like PIP, this coverage can help you pay your medical bills related to a car accident. However, this coverage also extends to its passengers and a family member who was driving the car when the accident occurred. Also, if you or a family member is injured in another car or as a pedestrian, this coverage can help pay for medical expenses.

COVERAGE THAT HELPS PROTECT YOU FROM UNINSURED DRIVERS

Uninsured / Underinsured Driver:
This coverage can help protect you if you are run over by a driver who does not have car insurance or whose policy limits are too low to cover the full costs of the accident. It can help you pay your medical bills and, depending on your state’s insurance laws, possibly damage to your vehicle.

COVERAGE THAT HELPS PROTECT YOUR VEHICLE

Collision:
If you need to repair or replace your vehicle after a collision with another car or object, this coverage can help you cover the costs.

Comprehensive:
This coverage can help pay for damages to your car that are not related to a car accident. Examples: theft, animal damage, fire, or falling objects.

Guaranteed Asset Protection (GAP):
If your vehicle is lost in an accident or stolen, your insurance company will generally pay you fair market value for the car. However, if you still owe a financial institution more than the car is worth, GAP coverage can help reimburse you for the cost difference.