The 101 to Car Insurance Angela Biava

from September 2019 Gallup Journey Magazine

Q & A for Dr. Valda

The 101 to Car Insurance

By Angela Biava

Car insurance is AWESOME!! Everyone has it, everyone needs it, but most people really do not know what their car insurance covers. You just go along paying that bill until there is an accident and then you are forced to take a literal crash course in automobile insurance coverage. Instead, I thought I would explain some of the basics of your car insurance policy so that you can review your own policy and get more comfortable with what you have, and more importantly, what you are paying for.

So, imagine you are driving along on a bright sunny New Mexico afternoon. In fact, the sun is so bright you decide you need your sunglasses, and as you fumble putting them on, you rear-end the car in front of you. Luckily, no one is injured but you did do some damage to the car you hit. This is where your LIABILITY coverage would be needed.

Liability coverage is required by law on any registered vehicle in your name that you intend to drive on public roadways. It insures that you are financially responsible in the event you injure a person or damage an individual’s personal property in an accident in which you are at fault. Each state has its own required minimums, and you always have the option to purchase coverage beyond those minimums. Review your current coverages; you may be surprised at how little or how much liability coverage you have.

Going back to that sunny day, what if it was you that was rear-ended and what if the driver who hit you did not have insurance? Well, your first thought might be, wasn’t that driver legally required to have insurance? You would be correct, but you also know that not everyone follows every law all the time. In this scenario where the other driver does not have insurance, your UNINSURED MOTORIST coverage would be needed.

Uninsured Motorist coverage protects you and your property in case you are in an accident caused by someone that did not have the required insurance for that vehicle. While this type of insurance is not legally required, it is strongly recommended. Usually, your uninsured motorist coverage limits will mirror your liability coverage limits. Once again, it is important to know what those coverage limits are before you are involved in an accident.

The other important aspect of car insurance is protecting your vehicles value. This is covered by what people usually refer to as “full coverage.” When someone mentions “full coverage,” what they are really talking about is COLLISION and COMPREHENSIVE insurance. Unlike liability coverage that pays for damage done to someone else’s vehicle, these types of coverages help pay for the cost of repair to your vehicle when it is damaged. Collision covers your vehicle when it is in an accident with another vehicle or object. Comprehensive covers your vehicle when there is some other type of damage such as fire, theft, a rock flying in the air while driving, etc.

When discussing collision and comprehensive, it is important to discuss deductibles. A deductible is the amount of money that must be paid out of pocket by you, the insured, before the insurance company begins paying any repair expenses, like when you go to the doctor and you pay a co-pay; it is the same idea. Just like your medical insurance, the higher the deductible the cheaper the auto insurance. It is important to find the right balance of choosing a deductible that will fit into your budget in the event of an accident while also managing the cost of your monthly insurance premium. Reviewing your current policy to confirm those deductible amounts will really help prevent any surprises in the event you ever need to file a claim with your insurance company.

All insurance is meant to protect you and personal property in the event that the unexpected happens. As with other aspects of your life, it is valuable to know what is and is not covered when that crazy situation does happen. While you may find the information I covered helpful, there are many other aspects and details to car insurance that you should educate yourself on.

If you have any questions about your auto, home, or life insurance, do not hesitate to call our office and speak to one of our licensed professionals. They can discuss your individual situations and help determine what type of insurance best fits your needs.

Our office is located in Downtown Gallup at 196 E Hwy 66, between First St. and Puerco Dr. Or if you prefer to call, 505-722-6900.