Auto Insurance IQ

 
Auto insurance is pleasantly demystified with these five “gotcha” questions about various aspects of coverage. Though applicable nationwide, the lessons here should hold particular weight for California drivers, being more numerous than drivers in other states.

What does “Underinsured Motorist Bodily Injury” protection cover?

Underinsured Motorist Bodily Injury (UMBI) coverage kicks in if other party is at fault and you have sustained injuries because of an accident. The other party in an accident may have Bodily Injury Liability (BIL) up to some limit. If your injuries cost more to treat than their BIL limits, the remainder is covered by your UMBI. Different parts of the country will have different risk profiles for UMBI incidents. For instance, in terms of auto insurance California is an environment where UMBI is very important.

Is collision coverage dependent on who was at fault?

Even if you are at fault, collision coverage will help fix or replace your vehicle, minus the deductible. Note that collision coverage can augment un- or under-insured driver situations. UMBI may not necessarily cover vehicle damage. With auto insurance California offers the largest statewide customer pool. This means that the Golden State will have the most “opportunities” for collisions to happen.

What are typical limits for Rental Reimbursement?

Thirty and fifty-day limits are common for rental reimbursement. Rental reimbursement can be a lifesaver when mechanics take their time with repairs. Rental reimbursement limits apply to dollar amounts as well as time limits. $900 and $1,500 limits are typical. When renting, be as modest as possible with your choice of vehicle.

Can a car insurance policy offer any medical coverage aside from Bodily Injury-related coverage?

Yes! To offer another layer of safety, insurance companies provide Medical Payments (MP) coverage. MP can activate regardless of fault and covers the driver and any passengers hurt in an accident. Essentially, MP is a supplement or case-specific substitute to health insurance.

What is the benefit of high deductibles for comprehensive coverage?

Fires, floods, hail, vandalism and pretty much any vehicle damage not directly linked to a crash goes under comprehensive coverage. Someone who takes good care of their car and has some emergency savings can come out ahead from high-deductible comprehensive coverage. In the unlikely case a claim is filed, the one-time impact of a deductible is offset by substantially lower premiums.

Disclaimer: This is for information purposes only and NOT a recommendation from Mills Insurance. Please contact a licensed insurance agent specialist to discuss insurance coverage’s and laws.

Mills Insurance Services, Inc. A nationwide insurance company is at your service for the following insurance needs:
• Home insurance
• Auto insurance