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Auto Insurance

Car Insurance Prepares You for the Unexpected

Auto Insurance Birmingham AlabamaTraffic accident scenarios are common, from fender-benders to highway crashes. In fact, according to the Census Bureau, over 10 million accidents occur on U.S. streets each year. The key is to be prepared so that the costs involved in recovering from an accident are not devastating to your finances.

What Does Car Insurance Cover?

There are four primary types of insurance coverage:
1. Liability insurance

If you cause an accident or cause injury to another person or their property with your vehicle, your liability insurance will help to cover your legal obligation, up to the limits of your policy.

There are two types of legal obligation:

  • Bodily injury liability: If you cause an accident that harms another person, your liability coverage would pay for “pain and suffering” claims, medical expenses including hospitalization and surgery and even lost wages for the injured parties, up to your policy limits. Bodily injury liability typically has two limits: one for each person injured and one for the total injury costs of the accident.
  • Property damage liability: If you cause an accident that damages or destroys another person’s car or truck, your liability insurance would pay for the repairs to the other driver’s vehicle, up to your property damage limit. Likewise, if you run into a building or drive into a hedge, your property damage liability coverage will cover the costs of replacing or repairing the damaged items.

Liability insurance also helps to cover the costs of lawsuits that may arise from an accident. For example, if an injured driver or passenger files a lawsuit against you, your liability insurance would help to pay for your legal defense. Note that you will likely need legal defense in court whether or not you are found at fault for the damages.

2.  Uninsured/Underinsured Motorist Coverage

You may have excellent car insurance, including collision, “other than collision,” and plenty of liability coverage to pay the costs of accidents you cause and even your legal defense if you are sued. Unfortunately, many other people driving around do not have adequate coverage. Many people drive without auto insurance at all, while many others buy the very minimum required to put the car on the road. What happens when someone who is driving uninsured causes significant harm to you or damage to your car in an accident? Situations like this are the reason many people choose to buy uninsured and underinsured motorists coverage.

Car Insurance and Uninsured/Underinsured Motorists Statistics
    • There are 200 million licensed drivers in the U.S.
    • Statistically, about 14% – or 1 in 7 motorists – drive with no insurance
    • 20% of motorists carry the minimum liability coverage
    • According to the NHTSA, every 10 seconds someone in the U.S. is involved in an accident

Uninsured/Underinsured Motorist: This coverage pays for injuries and property damage you suffer in an accident when the driver at fault either is uninsured or does not have enough insurance to cover your injuries and damage. It will also cover you in the event that a hit-and-run driver flees the scene and you cannot file a claim against that driver’s insurance company.

The cost of your UM coverage may be well worth it in the event that you are involved in an accident. Because the costs are prorated into your premium, you may not even notice much difference in what you pay after adding this important protection. One strategy is to increase the amount of your deductibles on your collision and comprehensive coverage. The credit you will get from changing the deductibles can help offset the additional premium.

3. Collision Insurance

Vehicles are a vital mode of transportation for millions of people today. One of the unavoidable circumstances of driving a car is that you will be around other cars and other drivers. Because we all make different decisions in traffic and have different driving capabilities, collisions do happen.  The collision portion of your auto policy helps pay the bills when your car suffers damage in a collision with another vehicle or an object.

4.  Comprehensive Insurance

Comprehensive coverage, which is also known as “other than collision,” pays for losses to your vehicle if it suffers damage from something other than an accident. Events that are included in the definition of comprehensive insurance include weather (think hailstorm, earthquake, flood or tornado damage), fire, vandalism, theft and damage from running into an animal.

This insurance doesn’t just protect you against deer strikes and hailstorms. Here are 5 surprising things that are also covered:

1. Defect-related fires: According to data from the National Fire Protection Association, between 2006 and 2010 there were roughly 152,300 vehicle fires per year in the United States, causing $536 million in property damage. Mechanical failures, electrical failures and malfunctions were factors in roughly two-thirds of those fires. Fire damage can be extensive and very expensive.  Luckily, comprehensive insurance covers all types of fire damage.
2. Rodent damage: Damage done by squirrels, mice and other rodents happens more often than you might imagine and repairs can be expensive. Rodents tend to hang out in the engine compartment and use their razor-sharp teeth to cut through wiring harnesses or fuel lines which can cause issues with the electrical or fuel systems. Comprehensive insurance covers these repair bills.
3. Riots: If you happen to be in the wrong place at the wrong time, you may find your car flipped, set on fire or all of the windows smashed out. Riots, protests and victory celebrations can quickly spiral out of control resulting in a completely totaled car or at least some very expensive repairs. Comprehensive insurance is the only insurance coverage that will pay for riot damage.
4. Animal Contact: There are roughly 1.5 million vehicle collisions involving deer every year, according to National Highway Traffic Safety Administration. These accidents can be costly, with the cost of a deer-related claim averaging $2,730.While deer are by far the most common animals that vehicles come in contact with, they are not the only ones that can damage a car. Regardless of the animal, comprehensive insurance will step up and cover costs of repair.
5. Broken Windshields: Cracked and broken windshields happen fairly often. A rock puts a small ding in your windshield and the next thing you know there is a large crack. Comprehensive insurance covers the cost of replacing the windshield.

Collision and Comprehensive Coverages Both Have Deductibles, So What Deductible Amount Should I Choose?

This answer depends on the car you are insuring, its value, and your budget. Here are some things to consider when choosing your deductible:

      • Deductibles can be $100, $250, $500, $1,000 or more. Once you pay that deductible at the time of repairs, the collision or comprehensive coverage would then pay 100 percent of the bill above the deductible, up to the limit set on your policy.
      • If you have a decent cash reserve on hand for emergencies like car repairs, then you might pick a higher deductible to keep your premiums low.
      • The newer and more high-valued your vehicle, the more you will save with a higher deductible.
      • If you have little cash reserves, then you might want to pick a low deductible and pay a slightly higher premium.
There are also several other types of coverage available to you, including:
      • Medical Expenses: This coverage pays for injuries that you, a family member or anyone else riding your vehicle may suffer in an auto accident, regardless of who is at fault. It also pays for injuries you or your family members may incur while riding in other vehicles.
      • Rental reimbursement: Pays a certain amount daily for a replacement vehicle if yours is in the shop for repairs.
      • Roadside Assistance: Many insurance companies offer this optional coverage. If you need a tow or service for a flat tire or dead battery, roadside assistance will provide that service for a nominal premium.

As you consider your policy needs, it is important to keep the coverage limits in mind. The costs of a severe accident can quickly exceed the limits. If that occurs, you will have to pay for costs out of your own pocket.

It is always best to consult with an insurance professional to make sure that you are adequately covered. Call Hughes Insurance Services of Alabama today for your free no obligation auto insurance quote.

Hughes Insurance Services Of Alabama

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400 Century Park South
Suite 106
Birmingham, Alabama 35226
(205) 822-6778
(205) 417-1444

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