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The Winding Road of Automobile Insurance

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Auto insurance is an important element in today's mobile society. As you choose the coverage that's right for you and your family, you will most likely have to navigate through a maze of options, terminology, and costs. To help you along the way, here's a quick look at some key components of a typical automobile insurance policy:

Bodily Injury Liability.
Perhaps the most important coverage on your policy, this protects you if you cause an accident resulting in injury to others. A severe accident may not only seriously injure someone else, it could also cripple you financially. High limits are generally recommended here, especially if you own property or other assets.

Property Damage Liability.
This feature covers you for damage you may cause to another's property. This generally includes vehicles, telephone poles, fences, and the loss of use of damaged vehicles (especially important if you are involved in an accident with a business vehicle that generates income).

This type of coverage insures against damage to your vehicle caused by collision with another car or object, or an overturn. It generally pays for repairs or provides—in the case of a "totaled" vehicle—a cash payment representing the vehicle's actual cash value (ACV). Although collision coverage can add considerably to a policy's overall cost, it is a valuable component, particularly if you own a newer or higher-priced automobile.

This covers physical damage to your car caused by events other than a collision or overturn, such as vandalism, fire, theft, contact with an animal, hail, or flooding. Comprehensive coverage is optional, but may be required if you have a car lease or loan.

Medical Payments.
Some policies offer coverage associated with medical expenses for you or others riding in your car. These expenses are typically covered even if you or the person driving your car is not at fault. Coverage is generally limited to a stated dollar amount in the policy (e.g., $2,500 per person).

Uninsured Motorist Coverage.
This coverage helps pay for damages or medical expenses (exceeding the limits of Medical Payments Coverage) resulting from an accident caused by an uninsured motorist. Because some states do not require automobile insurance, or some "risk takers" illegally drive an uninsured vehicle in a state where automobile coverage is mandatory, there is always the chance you could be in an accident where the other party involved is uninsured. If the other party is at fault but has no insurance, you may be hard pressed to recover damages. For this reason, Uninsured Motorist Coverage is often a valuable addition to a policy. In many states Underinsured Motorist Coverage is also available, which provides protection for you, your family members, and others in your auto for injuries caused by someone who has inadequate coverage.

If you would like additional information regarding a current policy or have questions about what type of coverage you should have, please call or e-mail us.

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