There are a lot of myths out there that make buying and obtaining auto insurance quotes more difficult to understand. Add the number of different types of car insurance available to purchase and the task gets even more daunting.
Even if you already have a policy, they can be difficult to read and understand. Questions about whether you have the right coverage for you can linger.
Having a basic understanding of the pieces that make up your policy can help. Here’s what you need to know to decode a car insurance policy.
The first page of your automobile insurance policy is normally the Declarations Page. It will include your personal contact details and descriptions to identify the vehicle covered under the policy.
It also sets forth all of the types of car insurance coverage you have and the maximum limit your insurance carrier will pay for each type. It will also include the dates the policy begins and ends.
Breakdown of the Different Types of Car Insurance
In North Carolina, all vehicles are required to be covered by certain types of insurance. They include bodily injury liability, property damage liability, and uninsured/underinsured motorists.
The minimum insurance requirements are often referred to as “full coverage”. But there are other types of insurance you can add to, or be required to add to, your policy.
Bodily Injury Liability
As mentioned, body injury liability insurance is a required type of car insurance in North Carolina. North Carolina requires coverage of $30,000 for one person and $60,000 for two or more people.
So if you have the minimum insurance, your policy will cover up to $30,000 in medical bills for someone who gets hurt by someone driving your vehicle. If more than two people are injured during the same accident, the most your insurance will cover is $60,000 in medical expenses for all involved.
Property Damage Liability
In North Carolina, property damage liability insurance is required in the amount of $25,000. Property damage insurance will help pay to repair or replace other people’s property that is damaged by your car during an accident. This damage can include the other person’s car, fences, trees, road signs, fire hydrants, and more.
North Carolina also requires that every vehicle is covered by uninsured motorist coverage equal to the minimum requirements for bodily injury liability and property damage insurance. Uninsured motorist coverage helps pay you and your passengers’ medical expenses caused by someone driving without any insurance and when you’re a victim of a hit-and-run driver.
If you or your passengers are injured and your medical expenses exhaust the coverage limits of the other party’s insurance policy, underinsured motorist coverage helps pay additional money toward those bills. This is extremely helpful when injuries are severe and can easily exceed the $30,000/$60,000 bodily injury minimum coverage limits.
Collision insurance is not required by North Carolina, but it is required by the lender during the period when you are paying off the car. This coverage is to help protect the lender’s interest in the vehicle while they still hold legal title to it. Collision covers the repair or replacement value of the vehicle.
Comprehensive insurance is also not required by North Carolina, but it is another type of insurance required by lenders. Comprehensive covers damage to the vehicle that isn’t the result of a car accident. It repairs or replaces the vehicle in the event the vehicle gets stolen, gets damaged intentionally by a third party, or by mother nature.
Person Injury Protection (PIP)
Personal injury protection coverage is available in North Carolina. It is an optional add-on that can help you pay for medical expenses no matter who was at fault for the accident. PIP covers you and your passengers.
Auto insurance policies can also include deductibles. Deductibles are the amount you will need to pay out-of-pocket before a particular part of your policy gets paid by the insurance carrier. For example, if you have a $500 deductible for Collision insurance, you will need to pay $500 first before the insurance company pays the rest.
It is also likely that you can raise or lower the deductibles on your policy. If you opt for higher deductibles, you can lower your monthly insurance premium. Or you can opt to have a lower deductible and pay more each month when you pay your insurance premium.
Another item that may get included in your policy is the discounts you qualify for. These discounts affect the price of your insurance policy. Different discounts are available in different states and they vary by the insurance company issuing the policy.
Some discounts that may be available in North Carolina are discounts that relate to your driving record, such as being accident-free or having a good driving record for a specific period of time. Others that may apply are having an airbag or anti-lock brakes, insuring multiple cars on the same policy, and being over the age of 55.
Check Your Auto Insurance Policy Today
Car insurance is one of those things you need to have correct prior to needing it. Take the time now to check your policy to see what types of coverage you have for the different types of car insurance.
Make sure your policy meets at least the current minimums set by your state. You may also find that raising your policy limits to higher than the minimum may be necessary to properly protect your individual interests.
Contact us if you would like a quote or have questions about your current car insurance policy. We’re here to help make sure you have the right insurance for your needs.