Auto insurance pays for damages, injuries, and other losses that are detailed in your policy. Depending on the type of coverage, auto insurance can either pay for your damages or another driver’s damages, or a passengers damages.
The most common types of auto insurance are:
LIABILITY pays for damage caused by you to another person or another person’s vehicle or other property as a result of an automobile accident. The minimum coverage allowed is $25,000 per person (and $50,000 incident) for bodily injury and $25,000 for property. Types of liability coverage include:
- Bodily Injury (BI) If you injure someone in an auto accident for which you are legally to blame, this coverage will pay claims for injury or death against you and the cost of legal defense.
- Property damage (PD) pays for damage that you cause to someone else’s vehicle or property for which you are legally liable. This does not cover your car or property.
PHYSICAL DAMAGE pays for a loss resulting from damage to your vehicle or a vehicle operated by you. Physical damage also provides coverage if your vehicle is stolen. Types of physical damage coverage include:
- Collision (BI) pays for damage to your car from an accident regardless of fault. It usually includes a deductible and the insurance company pays the rest. Selecting a larger deductible can lower your collision premium.
- Other Than Collision (Comprehensive) pays for damage to your car caused by most anything other than a collision. Glass breakage, theft, fire, explosion, impact with an animal, vandalism and flood are some of these hazards. This coverage is also available with deductibles to lower your premium.
OTHER COVERAGE Other types of auto coverage include:
- Uninsured Motorists (UM) Unfortunately, not everyone purchases auto insurance. If you or your passengers are injured by someone who does not carry auto insurance, UM coverage will pay for injuries up to your policy limits. This includes medical expenses, loss of wages, and related expenses. UM coverage also applies if you are a victim of a hit-and-run driver.
- Underinsured Motorists (UIM) Just as some drivers don’t carry any auto insurance, other’s don’t carry enough to pay for damages from their accidents. UIM coverage pays for death and injury expenses to you or occupants of your car when the other person’s insurance is inadequate.
- Personal Injury Protection (PIP)) Coverage pays for medical expenses and 80% of lost income, regardless of who is at fault in the accident. It also pays for assistance with personal services you are unable to perform because of an auto accident. You, your family members, and your injured passengers are covered under PIP. Insurance companies must offer to sell you PIP coverage (and Uninsured Motorist Coverage) along with your liability coverage. If you decide not to purchase PIP, you must reject it in writing. PIP coverage is available at limits of $2500 and up.
- Medical payments pays for medical, hospital or funeral expenses for you and others injured or killed while riding in your car, regardless of fault. It also covers you and family members if struck by a car as a pedestrian or if riding in another car.
Texas Instruments just laid off 3,400 workers. The Austin-area has lost an estimated 28,700 tech jobs.. Many retailers and restaurants are closing, or at least cutting back hours.
What does this mean for the rest of us? Among other things, it means there will likely be a significant increase in the number of uninsured drivers on the road. Some Texas will have to choose between paying rent and buying car insurance. According to the Texas Department of Insurance, 15 – 20% of drivers were uninsured in 2008. Texas has about 16 million drivers, so that means about 3 million uninsured drivers were on the road.
The Texas legislature passed a law called TexasSure to allow police agencies to verify insurance coverage through a state-wide database. It is paid for with a $1 fee added to vehicle registration renewals. However, the program was not implemented until 2008. While the program will catch some uninsured drivers and may discourage some folks from driving without insurance, it is not going to help the person who is involved in a wreck with an uninsured driver.