Auto Insurance Coverages and Discounts Explained

Auto Insurance Coverage

Liability Coverage: Protects you in the event that you unintentionally cause injuries to other drivers or damage to other vehicles or property. This coverage normally comes into play when you are the at-fault party in an accident. Coverage in many states in generally “split limits”, meaning per person coverage, per accident coverage, and property damage coverage are separated with limits defined individually. For example; 50/100/50 means; up to $50,000 of coverage is available if one person claims injury damages, $100,000 is the maximum provided for all injury damages no matter how many people sue, and $50,000 is provided to fix cars or other property damaged by you. In addition, many auto policies provide attorneys fees and court expenses on top of the listed coverages.

Uninsured and Underinsured Motorist Coverage (UM): UM can provide coverage for medical costs, pain and suffering for bodily injury to you and others in your vehicle, if injury is caused by a driver with no coverage or not enough coverage. For example if you are in an accident where the at-fault party has no coverage, very little coverage, or flees the scene and is not found, and your injuries are deemed deserving of compensation in addition to the medical coverage provided by your policy UM coverage may be made available.

Personal Injury Protection (No Fault): Required coverage under Florida’s No-Fault Law. Provides a percentage of first dollar medical expenses to you regardless of fault in the accident. May people make the mistake of thinking that because of this coverage there is “no-fault” in an accident. This is incorrect and only refers to first dollar medical expenses sustained in an accident to a certain limit. The purpose of this coverage is to prevent minor lawsuits for medical bills from tying up the court system.

Medical Expense Coverage: May pay certain medical expenses for injuries sustained while occupying your car, regardless of who is at fault. This coverage is optional and simply provides for additional medical coverage beyond the standard personal injury protection coverage provided required by the law.

Comprehensive Coverage: May pay for damage to your car, less any deductible, caused by things other than collision or upset (fire, theft, glass breakage, for example).

Collision Coverage: May pay for damage to your car, less any deductible, caused by a collision with another object.

Towing & Labor: This coverage may provide a limited amount of reimbursement for expenses such as towing or car repairs made at the site of vehicle disablement.

Rental Reimbursement: This type of coverage provides limited reimbursement for a rental car used while your car is being repaired for a covered claim.

Auto Insurance Discounts:

Discounts may vary depending on the state and company but many are fairly standard across the industry.

Good Driving Record: Generally determined by the insured drivers previous three years driving record. In most cases if the insured driver has been been ticket and accident free there will be a discount available.

Driving a Safe Car: A vehicle safety discount will provide credit for cars that have tested and shown a history of limiting and preventing injuries to the vehicles occupants.

Low annual miles: The price you pay is determined by your risk and one major factor affecting risk is the amount you drive the car. If your annual mileage is below a predetermined number you may be eligible for a discount.

Student away at school without vehicle: If the primary driver of a vehicle is a student that is away at college and does not take the car to college with them a lower premium may be provided. The assumption is that the student will only be driving and have regular access to the vehicle on a limited basis such as holidays and for this reason the risk and price are lower.

Student with drivers education course: One of the most often considered discounts for young drivers. Either provided through a school or the insurance company young driver education can provide a reduction in premium.

Carpools: The reasoning behind this coverage is similar to the low mileage discount. Less driving equals less risk.

Seasonal Driver: Many drivers have vacation homes and keep a car there permanently. Many companies will reduce the premium or suspend coverages during the time when the car is parked and not driven.

Multiple cars insured with a company: A very common discount provided to customers who insure more than one owned vehicle with the same company.

Have additional lines of business insured with a company: Called a multi-line discount, provides a policy price reduction when an insured has vehicles and one other type of coverage such as homeowners insurance.

Longevity with a company: Many companies will allow for a lower premium based on the time a person has been with a company. The discount is intended to provide incentive to stay with that company.

Good Student: Studies has shown that good grades in school correlate to less accidents on the road and therefore insurance companies are willing to provide a lower premium to students with above average grades.

Anti-theft devices: Car alarms can deter theft, and reduce vandalism resulting in less insurance claims and a reason for reducing the premium.