Auto Insurance

Car Accident

Liability insurance is the most basic auto insurance and protects you in the event that an accident is your fault. Any damages, medical bills, and lost wages caused to others fall under the category of bodily-injury coverage. Property-damage coverage will pay to repair or replace items damaged by your car in an accident. The property-damage insurance also will help pay for any legal bills that may arise as a result of the accident.

Liability insurance comes in different forms and coverage levels, so it's important to know what you're buying. The policies come in packages, and the coverage options are usually given titles like "20/40/5." This means the policy will pay $20,000 for bodily injury per person, $40,000 for bodily injury per accident, and $5,000 for property damage. Many states require a minimum amount of insurance, but these policies might not be enough to protect you in the event of a serious accident. It's a good idea to consider carrying more than the minimum coverage required by law.

Totaled car / Accident

Auto insurance policies also have coverage for your car if the accident is your fault. Collision insurance will pay for repairs or give you the cash value of the vehicle if the car is damaged beyond repair. The cash value of a car can be found in resources like the Kelley Blue Book, as well as on a number of internet websites. It's very important to understand that the cash value is the amount of money the car is worth at the time of the accident. If, for example, you bought a $7,000 car two years ago, and it's Blue Book value is now only $4,000, you'll be paid $4,000 if your car is totaled (that is, the cost of the repair is judged to be more than the car is worth).