When you buy an auto insurance policy, you are buying a package of individual coverages. Each coverage protects you against different types of losses. Once you understand the various coverages, you can decide which ones to include in your personal insurance package. You can also determine the limits of coverage you will need. The following are some common coverages found in an auto policy. NOTE – Your policy may not contain all of these coverages.
Bodily Injury (BI) Liability Coverage pays, up to the coverage limits, for damages due to injury or death of others in a vehicle accident for which you or the operator of your vehicle are legally responsible. It also pays your legal defense costs. In most states this coverage is mandatory.
Property Damage (PD) Liability Coverage pays, up to the coverage limits, for another individual’s vehicle or property that has been damaged in an accident for which you or the operator of your vehicle is legally responsible. In most states this coverage is also mandatory.
Medical Payments Coverage pays, up to the coverage limits, for reasonable and necessary doctor, hospital and funeral expenses for you and your passengers injured or killed in an accident, regardless of who is at fault. Payments are usually limited to one to three years after the accident. This coverage is optional in most states without no-fault insurance systems.
Uninsured/Underinsured Motorists (UM/UIM) Coverage pays up to the coverage limits for pain and suffering which is not covered by medical, disability and PIP. Underinsured motorist coverage pays for bodily injury to you or your family resulting from the negligence of someone whose liability insurance limits are insufficient. The definition of an underinsured motorist varies from state to state.
Collision Coverage pays, up to the coverage limits, for damage to your vehicle or a vehicle you are operating caused by a collision or rollover. This coverage is usually required if you have a vehicle loan.
Comprehensive Physical Damage Coverage pays, up to the coverage limits, for damage to your vehicle or any vehicle in your custody resulting from theft, fire, vandalism, flooding, hail or other perils (but not damage by collision or overturning). It is usually required if you have a vehicle loan.
Rental Reimbursement pays up to a specified amount for rental vehicle charges while your vehicle is being repaired for damage covered under your policy. If you prefer not to incur the cost of renting a vehicle yourself and cannot be without a vehicle while yours is being repaired, you might consider this coverage.
Towing and Labor covers some costs incurred for services rendered at the place of breakdown or for towing to a repair shop. It covers the delivery of gas, oil or a battery, but not the cost of these items. If you lock the keys in the vehicle or need a tire changed, this may also be covered. These services are often included in auto club memberships, which can result in unnecessary duplicate coverage.
Motorcycle insurance typically offers a combination of collision, liability, theft, and related coverage designed specifically to meet the needs of motorcycle owners. If you own a motorcycle—whether you ride it or not!—you need this coverage to protect you from theft, collision, and other common exposures. Some of the items that may affect premiums;
- Your driving record, where you keep your cycle (in the open or in garage, your credit record, how many years you have been driving a motorcycle, your age, previous cycle coverage
- Anti-theft devices
Most states don’t require ATV insurance and you may have limited coverage if you have a homeowners policy, or even a mobile home renters insurance policy. If you have an ATV we urge you to contact us and let us review your specific policy to determine whether you need a separate ATV policy.
Many insurance companies offer discounts to help lower your premium such as:
- A discount for completing and approved ATV safety course.
- A discount for owning and insuring multiple ATVs.
- A discount for being a member of associations such as the Harley-Davidson Owners Group (HOG), American Motorcyclist Association (AMA) or the Honda Rider’s Club of America (HRCA).
Motor Home and RV Insurance
A common practice for RV owners is to insure their RV under their current auto policy. But too often the owner does not take the time to read what and how much is covered under their auto policy. In many instances, RVs covered under auto policies are not adequately covered.
One misconception RV owners have is that the personal property in their RV will be covered under their homeowners policy. This is true, but, coverage on personal property is limited when the property is kept somewhere other than the “residence premises.” Often the limit in a standard policy is very low and the usual policy deduction would apply.
To insure proper and adequate coverage, a RV owner should add a separate RV coverage to their current auto policy or secure a policy specifically for RVs
If the RV owner’s insurance carrier does not have this type of coverage available, there are insurance companies that specialize in RV coverage. Usually the cost is minimal, especially compared to the alternative of finding out the RV and it’s possessions are not covered after a loss occurs.
Tips When You Hit The Road
Before your trip, make sure you get a complete travel check-up for your RV including inspection of all belts and hoses, headlights, tires, and turn signals. Also don’t forget to make sure the towing hitch, fire extinguisher and smoke alarms are in working order.
Other good before trip tips are to make sure your cooking vent hood is clean to help avoid fires and to make sure you leave your trip plans and phone numbers with a relative or friend.
Finally, it is important to go over with everyone on the trip basic emergency procedures.
Remind everyone that it is safer to be in the RV during lightning. If there is a tornado warning you will want to find a tornado shelter or the next best thing which would be parking under a bridge or similar structure. Also, don’t ever drive through any deep water as the depth can be deceiving.
Boat & Yacht Insurance
According to information from the U.S. Coast Guard, property damage to boats has been increasing. Many states now require boats to be insured. If you have your boat on a loan or use a marina, you will probably also be required to insure your boat. If you are not required to insure your boat, it is important you still consider purchasing boat insurance.
Boat insurance works similar to the insurance for your car, and can protect in the same way. But, since boats have different features than your car, you will want to make sure you have all the coverages you need and any savings that may lower your premium.
Insurance coverages you will want for your boat:
- Physical Damage
- Medical Payments
- Motor Coverage
- Trailer Coverage
- Boat Covers
- Docking Fenders
- Communications Devices
Discounts you may be entitled to:
- New Boat
- Automatic Fire Extinguisher
- Burglar Alarm
- Ship-To-Shore Radio
- Approved Boating Education Course
Remember, since every boat is unique please make sure you check with us to see if you need any additional coverages or would be eligible for additional discounts.
Melton McFadden also offers small business insurance in Michigan for all of your business needs, including liability.