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Understanding Your Auto Coverage

Here's the deal. I'm going to try really really hard not to bore you with specifics for insurance coverages on your auto. However, if you feel negative towards insurance, don't understand the point in it, or just simply dislike even thinking about it, this may be perfect to help get a broad view on what it is you are or you are not paying for when you have to pay your 6 month premium.


All too often the complaints circle around the fact that many do not understand what is and is not covered, and of course many gripes stem from the increases in pricing. Let me just say that we can all do our part in helping slow increasing rates by slowing down, paying attention, and making smart choices. The other factors that play into auto insurance pricing are:

  • Driving record

  • Years of driving experience 

  • How often you drive

  • How far you drive

  • Type of car

  • Age of car

  • Number of Claims

  • Types of claims 

  • Credit score

  • Supporting policies.


There are 3 major parts to auto insurance coverage:

1) First part is covering liability: bodily injury to others and property damage. The state minimum in North Carolina is 30/60/25:  $30,000 bodily injury for each person, $60,000 total bodily injury for all persons in an accident and $25,000 for property damage. That means that those are the max pay outs to you to cover litigation charges if you were to injure or kill someone in an accident. Medical payments you typically want to align with your heath deductible because that could help offset the deductible cost, lower health deductible, lower medical payments, higher health deductible, higher medical payments.

2) The second major part of coverage is the comprehensive and collision. Comprehensive deductibles cover damage caused by events out of your control, such as an animal or natural disaster. It would also include theft, vandalism, glass and windshield damage, fire.

Collision deductibles pay the cost of repairing or replacing your vehicle if it is damaged in an accident, regardless of who is at fault. Older vehicles typically need a lower or no deductible.

3) The last part is covering motorists that are uninsured or underinsured. You typically want to allign the first part of your auto coverage with this part of your policy. Like it or not we are all paying for those that are choosing to drive uninsured or underinsured, keep that in mind in November.

Liability amounts should directly align with your assets, and I was recently told by an attorney that those amounts ideally should be set at the highest amount that you can afford. Accidents are often unforeseen circumstances, but can carry hefty consequences that you can protect yourself against. If you have a lot of assets to protect, you should have the coverage that will pay for the litigation so they don’t end up garnishing wages, taking from 401k, savings, etc.

Reach out for additional questions or a quote!





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