Auto Insurance
Auto insurance is by far the most common form of insurance due to it being required by law in every state if you choose to own/drive a motor vehicle. Although it is required by law in every state it is up to each individual state to determine the minimum liability limits a driver must maintain.
In the state of Oklahoma our minimum liability limits are $25,000/$50,000/$25,000 (25/50/25). While this is the amount required by law I NEVER recommend state minimum limits. The cost per month is minimal to increase your liability limits in comparison to the possible out of pocket expenses in the event of an accident which exceeds your limit of liability. My minimum recommendation for liability limits is 100/300/100 and depending on your individual situation I may strongly recommend even higher limits.
Here at Insure918, Inc. we offer a wide variety of insurance products to include personal, commercial and farm insurance.
LIABILITY COVERAGE:
The liability portion of your auto policy is the most important and portion of your insurance that is required by law. I like to view this as asset protection. In the event of an at fault accident your liability limits kick in to help return the not at fault party back to normal. There are two primary coverages within your liability coverage. First is for personal injury and is represented by the first two amounts listed on your liability limits.
For liability limits of 100/300/100. The first 100/300 are the amount your insurance company will pay for a third parties personal injury. The policy will pay up to $100k per person and a maximum of $300k per accident. So if three people sustain personal injury as a result of your at fault accident each person could receive a maximum of $100,000. If the injuries are in excess of $100k the other person can come after your personal assets to cover any damages not covered by insurance. This is why I always say more is better.
The last 100 on your liability limits represent the amount of money your insurance carrier will pay as a result of an at fault accident resulting in property damage. The reason I strongly recommend at minimum $100k in property damage is due to the skyrocketing cost of new vehicles. Most cars are at minimum $25k to drive off the dealership new and many vehicles these days exceed $50,000. If you maintain only the minimum limits of $25,000 and cause an accident in which a $50,000 is totaled you would be responsible to come up with and pay the additional $25,000 to the damaged party. I say a few extra dollars a month for higher limits is well worth it, and prevents you from having to dip into retirement or have your wages garnished.
MEDICAL COVERAGE:
Medical coverage on an auto policy is a no fault benefit to you and your passengers. I like to look at this as deductible assistance. Many major medical plans these days carry a large deductible before anything can be paid out. With Med Pay on your auto policy you can receive anywhere from $1,000 to $10,000 in medical payments to cover any up front medical expenses.
COLLISION COVERAGE:
Collision coverage is not required by law the same way liability coverage is. This coverage is optional unless you have a lien holder on the title. If you finance your vehicle nearly 100% of the time the company financing the vehicle will require you maintain collision coverage as a part of your liability coverage in order to protect the money they have invested into your vehicle. If a lien holder is on the vehicle title the insurance company is required to include the lien holder as a part of any settlement of money. They would receive money before you. Collision coverage is purchased in addition to liability and is meant to repair your vehicle in the event you cause an at fault accident. If you are not at fault the other parties liability insurance should work to fix your vehicle.
COMPREHENSIVE COVERAGE:
Comprehensive coverage like Collision is not required by law and can be added to your liability policy. Comprehensive coverage also works to repair your vehicle, but not as a result of an at fault accident. This coverage works to repair your vehicle when something happens that is out of your control such as hail damage, flood damage or hitting an animal. Deer hits in the fall and hail damage are the two biggest causes of comprehensive losses in the state of Oklahoma.
UNINSURED AND UNDERINSURED MOTORIST COVERAGE:
UM/UIM coverage is another optional coverage that works to protect you in the event of a not at fault accident. This coverage can be added or rejected as a part of your liability policy. You have the option of maintaining this coverage up to the amount of liability coverage on your policy. If you carry 100/300 personal injury liability, you may also carry up to 100/300 for this coverage. You can not carry coverage in excess of the liability limits that you maintain for others.
If you are in a not at fault accident and the at fault driver does not have insurance or does not carry enough insurance your UM/UIM coverage will kick in to help pay your out of pocket medical expenses. Please note in the state of Oklahoma UM/UIM coverage DOES NOT take into consideration your property damage as a result of the not at fault accident. If the other driver does not have insurance and/or carries the state minimum limits for property damage you MUST have collision coverage as a portion of your liability policy to repair any damage to your vehicle.