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Different Auto Insurance Plans and What They Cover

Different Auto Insurance Plans and What They Cover

There is a lot to know and understand about auto insurance plans, and today, we’re breaking it all down.

Driving and owning an automobile is a necessary part of life for most Americans; there are over 275 million registered vehicles in the United States! And, with owning and operating a car comes great responsibility. But even the most alert, cautious, and responsible driver can find themselves in a car wreck. 

Car accidents cause a literal and figurative mess and a massive headache. In addition to the literal wreckage of an accident, drivers can be held responsible for any associated costs, like medical expenses, legal fees, lost income due to injury, and so much more. 

The good news is that there are auto insurance plans that will give you and your loved ones peace of mind. This smart investment gives drivers a financial safety net if they find themselves in an accident. But what are the various auto instance plans out there, and what do they cover? 

In today’s article, we are diving into different plans and what is covered, what is not covered, and more.

Keep scrolling below to learn more.

Auto Insurance 101

Before we get into different auto insurance plans, let’s cover the basics — what is car insurance? Car insurance is a contract between a driver and a chosen insurance provider. Drivers pay a monthly premium; in return, the insurance company provides financial protection in case of a car-related wreck, accident, or property damage outlined in your policy.

So, why is auto insurance important? Well, for many reasons.

Whether you are behind the wheel on the road or your vehicle is parked in a parking lot or in your driveway, there are plenty of things that can occur that could result in an accident and your car becoming damaged. The various auto insurance plans provide a welcome and necessary safety net when drivers experience an accident.

As a vehicle operator, you can be held liable for any injuries and damage you cause to others while you are behind the wheel. If you are in an accident with someone who’s uninsured, you’ll be the one covering for injury and damage costs. The more insurance coverage you have, the less you’ll be paying out of pocket.

Moreover, it’s illegal to drive without. Of course, car insurance laws vary from one state to the next; but for the most part — we’re talking 47 states — drivers must have a basic car insurance policy as required by law.

Utah is one of the 47 states that requires all vehicle operators to have auto insurance. Utah law not only requires all drivers to have some level of insurance, but it also requires motorists to carry proof of insurance in their vehicles at all times.

Failure to provide proof of your auto insurance during a traffic stop could result in a Class B misdemeanor, a $400 or more fine for your first offense, and a $1,000 fine for any subsequent violations within three years.

Different Auto Insurance Plans

There’s no doubt that shopping for automobile insurance can feel overwhelming unless you understand the different plans and what each of them covers. You’ve probably wondered,” Does car insurance cover repairs?” and had countless other questions. Of course, each policy will vary to some degree from one to the next. 

Insurance companies often price their policies individually (a la carte), allowing you to customize your coverage to best suit your needs, wants, situation, and budget. Most insurance providers will issue policies in six-month or 12-month increments, which are renewable.

Auto insurance plans may include part or all of the following coverage:

Liability Coverage — Liability insurance coverage, also called auto liability coverage, offers financial protection if you are responsible for someone else’s property damage or injuries. If you are found liable for an accident, your liability coverage covers the other party’s medical and repair expenses (up to your policy limits). 

It could even cover your legal expenses if the other party files a lawsuit. Just about every car insurance policy has liability coverage, and nearly every state requires you to have it. Here are some examples of what auto liability insurance might cover:

  • Injuries to someone else caused by your driving 
  • Damaged caused to other vehicles by your driving
  • Legal expenses for car accident-related lawsuits

Medical Payments Coverage — Medical payments coverage, also called medical expense coverage or med pay, is part of auto insurance, not to be confused with health insurance. Med pay can help cover medical expenses if you and any passengers are injured in a car accident, regardless of who is “at fault” for the accident. This type of coverage is not available in all states and is optional.

If you are injured in an accident, med pay could help cover the following expenses for you or any of your passengers:

  • Doctor or hospital visits
  • Health insurance co-pays and deductibles
  • X-rays, surgeries, physical therapy, etc.
  • Ambulance or EMT fees
  • and more

As mentioned, med pay is optional. So if you cause an accident and do not have medical expense coverage, you will be paying out of pocket for all your medical bills. It’s important to note that auto liability coverage does not pay for your or any of your passengers’ medical bills after an accident. 

If you cause the accident, the bodily injury liability portion of your insurance coverage helps cover costs for the other party’s medical expenses. Similarly, if you are injured, and the other driver is at fault in an accident, their auto liability coverage could help cover your medical expenses.

Property Liability Coverage — Here is where the question, “Does car insurance cover repairs?” is partially answered. Property liability insurance, also called property damage liability insurance, is one of the major coverage types vehicle operators are legally required to have. This type of insurance covers the expenses of damage caused to others’ car-accident-related property.

Property liability coverage helps to ensure that drivers can take on some financial responsibility for damage caused in accidents where they are at fault. This coverage operates on a per-accident basis, with the insurance provider willing to cover costs up to the policy limit. 

Here are some examples of what might be covered:

  • Repair costs for damage caused to others’ vehicles, scubas replacement parts, or auto body shop labor fees.
  • Repairing damage to houses, fences, mailboxes, signs, lampposts, etc.
  • Attorney and legal fees for property damage claims 

Other Types of Auto Insurance Plans

Legally-mandated car insurance policies cover the damage your car causes, not the damage your vehicle incurs. To protect your automobile, you may want to look into the supplementary auto insurance coverage options:

Collision Coverage — So, does car insurance cover repairs for your car? Collision coverage will help cover repair expenses for damage to your car because of an accident with another car or object (tree, guardrail, etc.) when you are at fault. This type of coverage can help cover costs when your car incurs damage from potholes or rolling your vehicle. It does not cover regular wear-and-tear or mechanical failure.

Comprehensive Coverage — Comprehensive auto insurance protects drivers against damage caused by non-collision accidents such as fire, falling trees or rocks, vandalism, and other hazards. It also protects policyholders against theft.

Uninsured or Underinsured Motorist Coverage — This insurance pays for property damage and medical expenses you suffer in an accident when the at-fault driver is uninsured or does not have enough liability coverage to pay for your injury-related expenses.

Glass Coverage — Glass coverage provides policyholders coverage from windshield damage. Some policies even have protection against side and rear windows and sunroof glass. Your policy could have no-deductible glass coverage.

Gap Insurance — Collision and comprehensive insurance policies only cover your car’s market value, not the amount you paid for your vehicle. It’s important for car owners to remember that vehicles, especially new ones, depreciate at a shockingly fast rate. 

If someone steals your car or you are in an accident, and your vehicle is totaled, there may be a difference — or a “gap” — in what insurance will pay out and the amount you owe on the vehicle. To cover this gap, you must pay out of pocket or purchase gap insurance to make up the difference.

Auto Insurance Plans and At-Fault vs. No-Fault States

When you get into an accident with another driver, your insurance company steps in to help protect you and your finances from any aftermath. However, settling insurance claims depends on fault laws in your state.

In an at-fault state, the at-fault driver’s bodily injury liability insurance coverage pays for the other driver’s hospital bills. In contrast, your injury protection (PIP) insurance covers all medical expenses up to the policy limit in no-fault states.

Understanding how insurance claims are settled in your state is key and can help you feel at ease with the process if you are involved in a car accident. As it stands currently, 38 states and Washington, D.C. are at-fault states. The remaining 12 states and Puerto Rico follow no-fault insurance laws. Utah is among the no-fault states.

Auto Insurance Plans and Who They Cover

Most auto insurance plans cover you and any family members listed on your policy, whether you are driving your car or somebody else’s car (with permission granted). Many insurance plans also offer coverage when someone not listed on your plan is driving your car with permission.

Your personal auto insurance plan only provides coverage while driving for personal reasons, like running to the store or doing another errand, commuting to work, going on a road trip, etc. 

Most plans do not offer coverage for those using their car for commercial or business purposes, such as providing transportation services (Lyft, Uber, etc.) or making deliveries. However, some insurance providers offer supplemental plans for an additional price that extends automobile coverage for drivers offering those ride-sharing services.

Using your car for commercial purposes is not recommended without the proper and necessary coverage. Sure, it costs more, but it is an investment in your protection, and it’s worth it in the long run!

How Much Car Insurance Do I Need?

Most states outline the minimum liability insurance requirement amounts for every driver. Remember, this amount is required by law. It’s also good to remember that the minimum insurance requirements may not be enough to cover damages caused by an accident. In these situations, drivers responsible for accidents may be required to pay additional expenses out of pocket.

To determine a good amount of car insurance for your situation, you may want to consider the following:

  • The kind of car your drive (and other vehicles you operate)
  • Your assets’ actual value
  • How and when you drive
  • Who is riding in the car with you

Find All of Your Auto Insurance Plans at Bear River Mutual

Are you looking for the best auto insurance plans or need auto insurance quotes? The experts at Bear River Mutual are here to help!

Yes, it is legally required to have car insurance in Utah, but it is also a great way to ensure you and your loved ones are financially protected, giving you the peace of mind you deserve. Whether you are looking for car insurance, renters’ insurance, homeowners’ insurance, or another type of insurance, insurance shopping is easy with the Bear River Mutual Insurance professionals.

Our trusted and knowledgeable team is here to help you with auto insurance quotes and to find the best policy for you and your family. We are dedicated to finding the perfect balance of value and protection, and we will always keep your budget in mind. We are ready to serve those in the Orem, Provo, and Salt Lake City areas, as well as those in surrounding cities in Northern Utah along the Wasatch Front.

Contact Bear River Mutual online or call us at 385-492-6582 for auto insurance quotes and more today!

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