Car insurance is required in all states. The law requires drivers to carry valid liability insurance in case they cause an accident that harms another person or damages their property. Drivers caught operating a vehicle without valid coverage can be subject to fines and citations for financial responsibility. Repeat offenders may be subject to imprisonment. In most states, vehicle owners are only required to purchase liability coverage. Vehicle owners then have the option of purchasing additional coverage to protect them in the event that they are involved in an accident with an uninsured or underinsured driver.
When it comes to purchasing auto insurance, the term “full coverage” is thrown around fairly often. Before making the ultimate decision, people consider the price of additional coverage and the likelihood they feel they may use it. It is common to hear many who have the following types of coverage believe they have full coverage.
- Liability coverage. This covers bodily injuries and property damage caused by your negligence, or the negligence of an authorized driver. This coverage is required in all states.
- Collision coverage. This pays for damage to your vehicle in the case of an accident.
- Comprehension coverage. This coverage can repair or replace your vehicle that was stolen or caused by something other than an accident. Examples include property damage caused by theft, vandalism, flood, or a similar of nature.
Just because you have the above three levels of coverage does not mean that you have full coverage. There are other types of coverage that should be considered when purchasing your policy.
- Uninsured/underinsured motorist coverage. This coverage applies if you were hit by a driver who had no insurance or not enough insurance to adequately cover your losses.
- Medical payments. Medical payments, referred to as Personal Injury Protection (PIP) in some states, is a no-fault coverage that pays for medical bills following a wreck, even if you were at fault.
- Rental reimbursement.
- Emergency road service.
Each additional layer of coverage increases your overall premium amount. Thus, many people are tempted to forego coverage beyond what is legally required by state law. Further, those who purchase all types of coverage may choose to buy coverage at state minimum levels, typically up to $25,000 per person and $50,000 per occurrence for bodily injury.
A valuable type of coverage is uninsured/underinsured motorist coverage. Of all 50 states, Tennessee ranks sixth in the number of uninsured drivers. This means there is a good likelihood that someone who strikes your vehicle is not covered at all. Without valid insurance, it can be difficult to recover against that individual for your medical bills, lost wages, and pain and suffering, not to mention your vehicle repairs. If you have uninsured motorist coverage, your carrier steps into the shoes of the uninsured defendant and can pay for your losses, up to your policy limits. The same can be said if you were struck by a hit-and-run driver who fled the scene and was never able to be identified by the police.
Insurance exists to hedge against risks. If you truly carry full coverage, your life can be made much easier following an accident. However, each person’s financial circumstances should be examined when deciding the type of coverage to purchase, as well as the amount of policy limits.