5 Most Commonly Misunderstood Things About Car Insurance

  • Everyone takes out car insurance now a day as it is the best precautionary measure in case of an accident. The thing that most people do get wrong however is in understanding that their car insurance can’t cover every single thing that they want it to cover. This generally happens when they don’t read the fine print or ignore the many conditions that apply in case of any emergency or accident.

    To avoid unnecessary embarrassment when you file a claim and to educate you even more about car insurance, we bring you the five most common misconceptions that people generally have about car insurance. Even if you think that you have got everything covered, do go over the points as it is always better to know more.

    1. Understand the Bodily Injury Coverage Clause

    Many people believe that the bodily injury coverage is for their own injuries and that in case of an accident, it will cover their medical bills. This is completely false and you need to understand that the bodily injury coverage in your car insurance is not for your injury and will not pay for your medical bills. This is to cover the costs that you will incur if your car accident harmed another person. This can be a driver, a passenger or even a pedestrian. This is for the third party who might have sustained injury due to your car accident. It is not for your own costs.

    2. Personal Injury Protection Covers Injuries

    Personal Injury Protection or PIP as it is generally called is only for injuries sustained. Unlike its name, it is not used for any damage that any property or your car might have suffered in case of a car accident. It offers medical coverage for you or any passengers that might have been in the car. It can also cover the costs for loss of wages if you are too injured. However this coverage comes with a condition as your personal injury protection cover has a set limit and you can’t exceed a maximum amount. All your expenses need to be under the maximum limit.

    3. Property Damage Liability Coverage

    This coverage is an important one as it covers any costs that are incurred by damaging any other vehicle. It also covers property damage that might be caused by your car accident. You can’t pay for the damage that your car suffered through this. This is only to pay for the damage that someone’s property suffered because of your car accident. Collision coverage is what you need to go for if you want to cover the damage expenses for your own car that was involved in an accident.

    4. Understand What Comprehensive Coverage Means

    Comprehensive coverage has a different meaning when it comes to car insurance. This is yet another important coverage that you need to understand as it helps you the most in case of an unfortunate event related to your car. Similar to its literal meaning, comprehensive coverage can help you pay for many expenses other than direct car collision. You can use it many scenarios like in case your car gets damaged by weather conditions like hailstorms or by a fire accident. Any injury sustained by your car due to a set of reasons like bird damage and many more are covered by this coverage.

    5. What is the Deductible?

    The deductible is a common term used in car insurance. This is the amount that you need to pay on your own for any car insurance claim and this is before your company pays the claim for you. The higher you pay; the lower is your premium. Discuss with your insurance agent to get more insight on your deductible. Also check if your situation or driving record makes you eligible for any extra deductions.

    So, these were some common misconceptions that people might have about what their insurance does and does not cover. If you think we missed something then comment below!