Auto Insurance

• Collision Coverage – This basic insurance type covers your vehicle if you collide with something–say other cars or maybe a wall, barrier, or bridge. This coverage will reimburse you for what your car was worth before the accident, minus your deductible. 
• Comprehensive Coverage – This covers things that may happen to your car that is not directly related to a collision, such as hail, theft, fire, hitting a deer, vandalism, or the classic tree falling on your car. Remember, comprehensive coverage only covers your vehicle minus your deductible. 
• Liability Coverage –  Here is a big one. This portion cover damages to someone else’s car or property when you are at fault in an accident. Liability coverage is often mandated by law. So as the driver, it is important that you make certain you have adequate coverage.  

A common misconception is that “full coverage” means that you are covered no matter the extent of the accident. Unfortunately, this is not the case. You are only covered up to the amount of liability coverage you carry. For example, Missouri’s state minimums are 25/50/25. This means you have $25,000 per person to cover their medical expenses in the other vehicle, no more than $50,000 for everyone in the other vehicle combined, and then $25,000 for damage to vehicles and structures. Realistically, these state minimums are not enough. 

In short, if you are liable for a collision that totals a new truck, $25,000 is all the insurance company will provide – the remaining tens of thousands of dollars will be your responsibility. That is why it is fundamental to ensure you understand your coverage and make sure it is truly enough to cover you in an accident. 

• Medical Payments – This is also called PIP in some states. This coverage pays for any injuries to the driver or passengers resulting from an accident while driving your vehicle. Generally, these act as small payments that cover you until your health insurance kicks in.