Anyone with a car knows the pain of having to get a car fixed. If you’re lucky, that pain comes from wear and tear. But what if that pain comes from an accident… one that you may have even caused? Once that sinking feeling hits, it’s hard to know what question to answer first:
- Oh man, is anyone hurt?
- How bad is their car?
- How bad is my car?
- What will my insurance cover?
In that moment, you just want to know that you will be able to afford all the expenses.
Understanding your car insurance policy can provide some peace of mind, and help you to make sure that you have the right coverage and that you’re not paying too much. There are four basic parts to an auto insurance policy, but you will want to make sure that you check your own policy for additional details.
Liability insurance covers losses suffered by others. Policies distinguish liability by bodily injury (if someone has been hurt) and property damage (to their car, yard, etc.).
You will often see this referred to in your policy as “100/300/50”, or $100,000 bodily injury per individual, $300,000 bodily injury per accident, and $50,000 in property damage per accident. The amounts indicated are the recommended minimums.
Personal Injury will cover medical expenses for you (as the insured driver) and your passengers. Your policy will provide a maximum amount per person, which limits how much the insurance company will cover for medical bills.
Uninsured Motorist coverage is designed to protect you from loss when the individual at fault doesn’t have insurance. Normally, the insurance of the person who caused the accident pays for anything damaged. But if that person doesn’t have insurance, they may not have the money to cover everything, so you can rely on this policy. Maryland also has
Physical Damage coverage addresses certain unexpected things. The policy will list “perils” that might occur, such as fires, floods, theft, collision, etc. Before the insurance company pays for the damage, you will first have to pay the deductible. If the cost of fixing the car is more than the actual value of the car—in other words, your car is totaled—then repair coverage will be limited to the car’s value.
Pro tip: Record your deductible somewhere you can easily access. That way, in the event of an accident, you know that you have enough to cover what you might have to pay.
Car insurance can seem like a boring thing, until you are standing on the side of the road waiting for the tow truck. If you can familiarize yourself with some basic terms, you can feel just a little more confident that you know what you need to do (and how much it will cost) to get back on the road!