Is your car insurance actually insuring? Although you buy an insurance policy that covering a specific vehicle, several components make up the final cost:
• Bodily injury liability: Covers injury and death claims against you, and legal costs, if your car injures or kills someone.
• Collision coverage: Covers damage to your car up to its book value. Collision coverage carries a deductible, which is the amount per claim you have to pay before the insurance takes effect. The lower the deductible, the higher the premium. While it is legally optional, a lending institution or leasing company usually requires collision coverage.
• Property damage liability: Covers claims for property that your car damages in an accident.
• Medical payments: Pays for injuries to yourself and to occupants of your car. In several state, personal injury protection replaces medical payments as part of the basic coverage.
• Comprehensive (physical damage): Covers damage to your car from theft, vandalism, fire, wind, flood, and other non-accident causes. Comprehensive also carries a deductible.
• Uninsured motorist protection: Covers injuries caused to you or the occupants of your car by uninsured or hit-and-run drivers. "Under-insured" coverage also is available, to cover claims you may make against a driver who has inadequate insurance.
