Car Insurance 101: Car Insurance Basics Explained

This post is Car Insurance 101: Car Insurance Basics Explained

In its simplest form there are 3 parts or components of the car insurance policy. In layman’s terms we could categorize it this way:

1. Protection for other motorists
2. Protection for the car itself
3. Protection for you as the driver

In insurance terms it would be categorized this way:

1. Liability
2. Comprehensive and Collision coverage
3. Underinsured and Uninsured Motorist Coverage

Liability: This part of the auto policy will protect the policy owner if he/she is held liable for either bodily injury or property damage to another person. Should the owner policyholder of the vehicle cause an accident or someone the policy holder or vehicle owner loans his/her car to causes an accident the policy would pay up to the policy limits for bodily injury and property damage of the other party or parties involved. This protects the policy holder from claims made by “other” parties.

Physical Damage or Comprehensive and Collision coverage: This part of the policy is what protects your vehicle if it is damaged either in a collision with another object or by things such as fire, flood, falling objects or other perils that could damage the vehicle. This could include a hit and run situation where you don’t know who the other driver is but you still have damage to your car. Whether it was your fault or not, you can make a claim under this portion of the policy.

Underinsured and Underinsured motorist coverage: perhaps the least understood portion of the auto insurance policy and the most important. This part of the policy protects YOU as the driver if you are involved in an accident and the other driver who causes the accident has no insurance or not enough insurance to pay your bills. You can see how medical bills, lost wages for time off work and other expenses would add up. With so many drivers carrying to little or no insurance at all in Arizona, we recommend a robust under and uninsured motorist coverage.

For a free review of your policy please contact Insurance Professionals of Arizona at 480-981-6338 to talk about coverages.

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