If you’re driving a car in MN you already know a little about car insurance, mostly that it’s required by law. You may have heard some terms thrown around like deductible, liability or premium. But, do you really understand your auto insurance and how important it is to choose the right coverage for you and more importantly your family? Let’s break down a few sections of an average policy to give you a better understanding of how choosing the wrong coverage can turn a bad day into a bad life.
The first section is the liability section. A lot of people skim over this section trying to get to the price. That is a dangerous way of looking at insurance as your liability coverages are the most important. This section pays for accidental bodily injury and property damages to others. Injury damages may include medical expenses, lost wages or pain and suffering. In today’s world those sorts of damages can add up pretty easily. In the state of MN we are required to carry liability limits of 30/60/10. That means $30,000 for each person injured, $60,000 for the total number of people injured, and $10,000 for any property that is damaged. If you were to skid on black ice on a cold winter night and smash into a brand new Mercedes injuring 4 people that state minimum coverage you picked to save a couple dollars isn’t looking so good anymore.
The next section is the uninsured/underinsured motorist coverage. This pays for the injuries of you and your passengers in the case that a driver has no insurance or not enough coverage. Because you have no control over other drivers or their bad choices, it is incredibly important you review this coverage. Let’s take the above example again only this time it’s your car with you and your family in it. Again state minimum is 30/60/10, and if that driver has no insurance, or state minimum it’s not going to cover your damages. If you are properly insured, your uninsured/underinsured coverage kicks in covering what that person cannot. In MN currently 16% of drivers have NO insurance and another 35% are driving with state minimum coverage. That’s over HALF of all drivers on the road that could put you and your family in financial ruin if you are not properly insured.
The part of your policy that covers your personal vehicles is the comprehensive and collision. If your vehicle was totaled, would you have the money to replace it? If not, you will want comprehensive and collision. If you were to be in an accident or a storm comes through and hail damages your vehicle the collision and comprehensive would pay for the damages to vehicle less the deductible you choose. Deductible vary but in most cases they are in amounts of $100, $250, 500, or $1,000. For example, if you are in an accident that causes $2,500 worth of damage and you chose a $500 deductible, you are required to pay the $500 and the insurance company will take care of the remaining $2,000.
Insurance can be tricky so give us a call! For more information regarding auto insurance or a free consultation of your insurance coverage, contact us at (952) 445-5767.