Making Sense of Auto Insurance: What Coverage Do You Need?

Trying to understand car insurance can feel confusing. Words like liability, collision, and comprehensive might seem complicated. What do they mean? And what coverage do you really need? It’s normal to feel unsure if you have the right protection or if you're paying too much.

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At ATI, we believe understanding your insurance should be simple. We want to help make things clear. This guide explains the common types of car insurance in easy-to-understand ways, so you know what they cover and why they're important.

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The Basics: Common Car Insurance Coverages Explained

Your auto insurance policy is like a protection plan made just for you. Here are the main parts you'll likely see:

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1. Liability Coverage (Bodily Injury & Property Damage):

   • What it is: This is the most basic part of car insurance. Almost every state requires you to have it. It pays for damage you cause to other people or their property if an accident is your fault.

   • What it covers:

     • Bodily Injury: Pays for medical bills and lost work time for people hurt in an accident you caused.

     • Property Damage: Pays to fix or replace other people's things you damage, like their car or a fence.

   • Why it's important: Protects you from having to pay large amounts of money if you hurt someone or damage their property. States have minimum amounts you must buy, but getting higher amounts can help protect the money and property you own.
      

2. Collision Coverage:

   • What it is: This pays to fix your own car after an accident, even if the accident was your fault. This includes hitting another car or an object like a pole.

   • What it covers: Pays for repairs to your car, but first, you pay a set amount called a "deductible." If your car is too damaged to fix ("totaled"), collision coverage pays you what the car was worth before the accident.

   • Why it's important: Very useful if your car is newer or if you have a car loan (the bank usually requires it). If your car is older and not worth much, you might skip this to save money, but then you'd have to pay for repairs yourself if you cause an accident.
      

3. Comprehensive Coverage (Also called "Other Than Collision"):

   • What it is: Protects your car from damage not caused by a crash.

   • What it covers: Things like theft, fire, hail, flood damage, vandalism (if someone damages your car on purpose), or hitting an animal like a deer.

   • Why it's important: Covers many common problems you can't control. Like collision, banks often require it if you have a car loan, and it's good for newer cars. You also choose a deductible amount that you pay first.
      

4. Uninsured/Underinsured Motorist Coverage (UM/UIM):

   • What it is: This protects you if you're in an accident caused by a driver who has no insurance or not enough insurance to pay for your costs.

   • What it covers: Pays for your medical bills and lost pay from work. Sometimes it can help pay for car repairs too (this depends on your state and policy).

   • Why it's important: Many drivers unfortunately don't have insurance or only have the minimum amount. This coverage helps make sure you're not stuck paying your own bills if they hit you.
      

5. Personal Injury Protection (PIP) or Medical Payments Coverage (MedPay):

   • What it is: Pays for medical bills for you and your passengers after an accident, no matter who caused it. Whether you need this depends on your state's rules.

   • What it covers: Doctor visits, hospital stays, and sometimes lost pay from work or help with things like childcare if you're hurt. MedPay usually just covers medical bills.

   • Why it's important: Helps pay medical costs quickly without waiting to figure out who was at fault in the accident.
      

Optional Coverages for Extra Help:

• Rental Reimbursement: Helps pay for a rental car if yours is in the shop after an accident covered by your policy.

• Roadside Assistance/Towing: Helps pay for towing, changing a flat tire, jump-starting a dead battery, or if you get locked out of your car.
   

So, What Do You Need?

The best mix of coverage depends on you:

• State Rules: You must have the minimum coverage your state requires.

• Your Car: Is it new or old? Do you have a loan? This helps decide if you need Collision and Comprehensive.

• Your Budget: Think about how much you could afford to pay yourself if something happened. Higher liability limits help protect your savings and property.

• Your Comfort Level: How much risk are you okay with taking?
   

Don't Guess – Get Personal Advice!

Knowing these basics helps you ask the right questions about your car insurance. But figuring out the perfect mix is easier with help.
 

At ATI, we're here to help you understand your choices. We listen to your needs and explain things simply. We want to make sure you have the right protection without paying for things you don't need. Call us today at 404.875.4700 and we can review your current policy for free or give you a quote. Let's find the right plan for you!