I know everyone is used to my cancer blogs..but this one is actually kind of important as well. Everyone has car insurance....ok, don't stop reading just yet. Many people have no idea what their auto liability coverage means. It is very easy to get the cheapest rate, Lord knows I did it before I got in the business..but reality is, this stuff actually kind of matters. If something happens and you are not properly covered, it could change your life forever, and not in a good way.
What I hope to do in the next few paragraphs is to explain auto insurance in an easy to understand way. I will start with your Liability limits. In IL, the minimum is $20,000 per person and $40,000 per occurrence with 15,000 in property damage. What this means to you is that if you get into an accident and cause serious bodily injury to the other people, the insurance company would pay just that...only $20,000 per person and $40,000 per accident. That third number is the property damage...total two $50,000 BMWs....the insurance company pays $15,000, you pay $85,000. Scary right? If someone has to go through 5 years of intense rehab or God forbid they are hospitalized for years...$20,000 is chump change. The minimum coverage that I recommend is $100,000 per person, $300,000 per accident and $100,000 property damage.
Other coverages you need to look at..Medical payments coverage. You may have this on your auto policy and not need it. A lot of this will depend on your health benefits at work. Do you have a high deductible at work? If so, maybe you want to include this, but if you have fantastic coverage at work and rarely drive around with people who do not have insurance, then you could forgo the coverage. It does provide coverage for people riding in your car.
Do you need the car in the event it cannot be driven as the result of an accident? You definitely need to add rental reimbursement. This will provide you a car for up to 30 days. As for rental cars, in most states, you can decline the coverage if you are out of town and renting a car. Your personal coverage will kick in provided you have full coverage. That being said, if you do damage the rental car, you will be responsible for the deductible..unless you buy their plan. Kind of a personal choice. Do you pay the extra $20 per day for peace of mind knowing you won't have to file a claim with your insurance company, or do you save the money knowing your policy will cover you subject to your deductibles? I always forgo the rental car insurance, but I am a risk taker :)
I think that is a quick synopsis of auto insurance. Hopefully I did not bore you to death cause we all know insurance is not fun. It is my career and I am damn knowledgeable about it, but it is definitely not my passion like cancer advocacy, fundraising and research are...that being said, I care about people being properly protected and would hate for someone to talk to an 800# and be sold the cheapest coverage without knowing what they have. If you ever have any questions, you can email me at firstname.lastname@example.org or call 312.787.0221