What Coverage Does Your Provider Really Provide?
A "near universal anxiety, dread and resentment" of SUV insurance rates causes people to basically ignore their automobile policies, said the manager of special information services for Consumer Union, publisher of Consumer Reports magazine.
As a result, many people "don't even know what their coverages are," Blum said, let alone whether they are paying too much. Failing to pay attention to auto insurance can result in paying "thousands, even tens of thousands of dollars more than you need to over your lifetime," Blum said.
Understanding what types of coverage you have -- and what you need -- is the first step in finding the best price. That way you can make an accurate comparison between multiple companies.
Here are the components of a typical auto insurance policy and the minimum coverages under state law:
-- Bodily injury liability. This covers injuries the policyholder causes to someone else in an accident, including the nebulous pain and suffering. The minimum amount of coverage under state law is $ 25,000 for each person injured, up to $ 50,000 per accident. This appears on policies as 25/50. These minimums can be woefully inadequate for people with a fair number of assets, consumer groups say, because policyholders are responsible to pay expenses not covered by their insurance. Consider increasing coverage to 50/100 or 100/300.
-- Property damage liability. This covers damage caused by the policyholder to someone else's property. The minimum amount of coverage is $ 15,000. Again, the minimum could be inadequate in the event that you are responsible for a multi-car accident. If you cause a three-car pileup, for example, each person you hit would receive $ 5,000, whether this covers damage to their vehicles or not.
-- Personal Injury Protection (referred to as PIP). This pays for treatment of injuries to the policyholder and passengers in the event of a collision. It also can provide other coverages, such as funeral expenses and weekly pay if injuries keep them out of work. The state minimum is $ 3,000.
In addition to the three coverage areas required by law, a handful of others should be considered, including:
-- Collision. Covers damage to the policyholder's vehicle from a collision. Unlike the above two coverages, collision and its related coverage -- comprehensive -- have deductibles ranging from $ 250 to $ 1,000 that must be met before the insurer will pay.
-- Comprehensive. Covers damage to a policyholder's car that does not result from a collision with another vehicle, such as fire, theft, falling objects, explosions, earthquakes, floods and other things.
-- Uninsured/underinsured motorist's coverage. Covers a policyholder's injuries that result from a collision with an uninsured driver or one that carries too little coverage. This SUV insurance rates provides a benefit if you are hit by another driver who carries too little bodily injury liability or none at all.
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