Auto Insurance Options For Rcas: What You Need To Know

Auto insurance is a legal requirement in most states, and while the specific requirements vary, there are some common types of coverage that car owners may need to purchase. These include liability insurance, which covers damage and injuries caused to others in an accident, and uninsured motorist coverage, which protects you if you're hit by an uninsured or underinsured driver. Other types of coverage that may be required or optional include personal injury protection, medical payments coverage, and comprehensive and collision insurance, which cover a range of problems like car accidents, theft, and vandalism. When determining the amount and type of auto insurance coverage needed, it's important to consider state requirements, personal financial situation, and the potential costs of accidents.

Bodily injury liability

In most states, bodily injury liability insurance is mandated by law, underscoring its significance in mitigating the financial impact of car accidents. The coverage limits for bodily injury liability insurance typically consist of a per-person limit and a per-accident limit. The per-person limit applies to each individual injured in the accident, while the per-accident limit comes into effect when multiple people sustain injuries. These limits are often presented as a series of numbers, such as $15,000/$30,000, indicating the maximum coverage available per person and per accident, respectively.

The specific coverage provided by bodily injury liability insurance encompasses a range of costs. It can help pay for the injured person's medical expenses, including emergency services, hospital care, recovery equipment like wheelchairs, and ongoing medical care. Additionally, if the injured person needs to take time off work for their recovery, this coverage can compensate for their lost income. Legal fees are also included in the event the injured party takes legal action against you.

To determine the appropriate amount of bodily injury liability insurance, it's advisable to consider the value of your assets. By assessing your financial situation and the potential costs associated with car accidents, you can make an informed decision about the level of coverage that best suits your needs.

Property damage liability

When choosing how much property damage liability coverage to purchase, consider factors such as whether you own a home or other expensive items, whether you travel in high-traffic areas, and whether there are a lot of expensive vehicles in your area. It is generally recommended to buy more coverage than your state's minimum requirements to ensure you have adequate financial protection.

In the context of auto insurance for RCAs, it is important to refer to the specific requirements of the state where the insurance is being purchased. As mentioned earlier, most states mandate a minimum amount of property damage liability coverage, so be sure to check the specific regulations for your state to ensure compliance and adequate protection.

Uninsured/underinsured motorist coverage

Types of Coverage

• Uninsured motorist bodily injury (UMBI): This covers medical bills for you and your passengers if you are hit by an uninsured driver.
• Uninsured motorist property damage (UMPD): This covers damage to your vehicle caused by an uninsured driver.
• Underinsured motorist bodily injury (UIMBI): This covers medical bills for you and your passengers if you are hit by a driver whose insurance is insufficient.
• Underinsured motorist property damage (UIMPD): This covers damage to your vehicle caused by a driver with inadequate insurance.

While not all states mandate uninsured/underinsured motorist coverage, around half of them require at least one of these coverages. Some states, like Illinois, mandate both, while others, such as Massachusetts and South Carolina, require only uninsured motorist coverage. In states that do not require this coverage, it may still be offered as an option.

The amount of uninsured/underinsured motorist coverage you need depends on several factors. For bodily injury coverage, consider matching the amount with your liability coverage limits. As for property damage coverage, you can select a limit that closely reflects the value of your vehicle.

Medical payments coverage

MedPay policies typically pay out automatically without requiring the policyholder to prove who caused the accident, and there is no deductible or co-pay. MedPay coverage limits usually range from $1,000 to $10,000 per person per accident, depending on the state and insurer. These limits are often discussed when first enrolling, and it is important to select the right limit as any amount owed for medical bills over the coverage limit will be the responsibility of the policyholder.

MedPay can help cover expenses such as hospital visits, nursing services, ambulance fees, surgery, and dental procedures. It can also help cover out-of-pocket costs for those with health insurance, such as deductibles and co-pays, and can be particularly useful for those without health insurance.

In states that do not offer MedPay, personal injury protection (PIP) coverage is typically available instead. PIP coverage is available in "no-fault" states and may also cover lost wages and funeral costs.

Collision and comprehensive insurance

Both collision and comprehensive insurance are optional coverages, but they are typically required for a car loan or lease. If you finance or lease your vehicle, your lender may require you to carry both types of insurance. While neither is required by state law, the coverage requirements in most states include bodily injury liability and property damage liability.

When deciding whether to purchase collision and comprehensive insurance, consider the value of your car, the likelihood of an accident, and your current savings. If your car has a significant market value, collision and comprehensive coverage can protect you from the potential economic loss associated with damage or theft. Additionally, if you do not have sufficient savings to cover the cost of repairs or replacement, purchasing this coverage is essential.

The cost of collision and comprehensive insurance can vary depending on factors such as the insurer, your location, and the value of your vehicle. Generally, comprehensive coverage costs less than collision coverage. You can adjust the cost by choosing a higher or lower deductible, which is the amount you pay out of pocket before the insurance coverage kicks in. Selecting a higher deductible can lower your premiums, but having a lower deductible reduces your out-of-pocket expenses in the event of a claim.

Frequently asked questions