There is mandatory insurance coverage that is required by each state of their drivers. This mandatory coverage is only a part of the automobile insurance that is available to protect you, your family and other drivers on the road. Listed below is some basic information to help you in deciding the levels of coverage you may want to include in your auto insurance policy.
There are six major areas of coverage for automobile insurance. The minimum levels of coverage vary from state to state. In general, these areas are: Bodily injury liability, Property damage liability, Personal Injury Protection, Collision, Comprehensive, Uninsured/Underinsured motorist’s coverage.
The state of Vermont requires their drivers to carry bodily injury liability and property damage liability. You must be able to show financial responsibility and while most people due this through a licensed insurance agent, you can also purchase a surety bond in the same amounts of coverage required for the mandatory liability. Or you can prove that you are covered by proving you have assets of $115,000 available to cover any injuries or damages caused by an accident.
You should know that the minimums that are required by the state are the highest amount that your insurance company will pay out due to injuries or death to you or any other people involved in an accident, as well as any property damage. These amounts are only what are required by the state and you can certainly select higher levels of coverage.
Any damages that you may have caused another person if an accident were to occur will be covered by your bodily injury liability. This coverage includes medical bills and loss of income. Property damage liability covers the repair and/or replacement of any property that was destroyed as a result of an accident.
Collision and comprehensive insurance are also two forms of coverage most people include on their policies. If you take out a loan when you are buying a car or if you still owe money on your current vehicle you must carry the proper insurance required by the lender to protect their investment. You cannot let the insurance lapse on a vehicle that is being financed. You will probably be required to carry collision and comprehensive coverage.
Collision insurance covers any damage to your car that was a result of hitting another vehicle, a tree, a telephone pole, etc. Comprehensive coverage protects the value and replacement of your car in the event that it is damaged as a result of anything other than an accident, for example if your car is stolen, someone breaks into it or there it suffers flood damage.
You should check with your insurance agent as to whether you need uninsured or underinsured motorist coverage. Uninsured motorist coverage pays for any damages that are a result of an uninsured motorist or a hit and run driver. And underinsured motorist coverage comes into play if the other driver, who is at fault, does not have enough insurance to cover you. However, this coverage is not used to cover damages to your car.
If you know ahead of time what the different types of auto insurance coverage are and what they cover will give you a head start when deciding on your insurance needs.