Auto and Home Insurance

Auto Insurance.
Most people think the main purpose of car insurance is to pay for your damages after an accident or to replace your car if it gets stolen.

While that is one benefit to auto insurance, it’s not the main purpose. 

The main purpose of auto insurance is to provide liability protection in case you injure or kill someone during a car accident or cause damage to other's property.

All 50 states legally require you to carry a minimum amount of this liability insurance. They don't care whether you have insurance to protect damages to your own car. 

There are 4 main parts to an auto insurance policy – not all of them are legally required.

1. Bodily Injury and Personal Property Liability (Required in All 50 States)
This insurance pays damages for other people's injuries or deaths caused by an accident that is your fault. It also covers any damages caused to property.

It will cover things such as medical bills, lost wages, pain and suffering. All 50 states require a minimum amount of liability coverage, however, these minimums are usually not adequate. If you cause more damage than what is covered, your personal assets will be at risk. 

2. Personal Injury Protection (Required in Some States)
This coverage pays for your own medical expenses and lost wages as well as your guest passengers if injured during an accident. 

3. Collision and Comprehensive (Not Required)
Collision provides coverage in case your car is damaged as a result of any kind of accident, such as crashing into another vehicle or into a utility pole.

Comprehensive covers your car in case it gets stolen or is damaged by natural disasters. 

You can elect not to have collision or comprehensive in order to save money. This works if your car is not worth much and you don't mind taking the risk to cover any damages yourself. 

4. Uninsured Motorist (Required in Most States)
Provides protection if you're involved in an accident where the other party does not have insurance or doesn't have enough to cover your damages. It also protects you in the event of a hit-and-run accident.

Homeowners Insurance
Your homeowner’s insurance is designed to protect you in case of loss or damage to your property. The second most important purpose of this insurance is to provide liability protection. A standard home insurance or landlord’s insurance policy includes coverage for a variety of perils which they insure against; for example, Fire, Lightning, Explosion, Windstorm, Hail, Riot or Civil Commotion, Aircraft etc… In the event of a claim, you are reimbursed for the cost of repairs or replacement.

Property Coverage. The most common Homeowners Insurance Policy covers damage to the property by Wind, Lightning, Ice, Snow, Fire, Smoke and Explosion. On an owner-occupied homeowner’s insurance policy, the home and personal contents are insured against damage incurred by covered perils on the policy.

Liability. Homeowners insurance provides liability coverage as well as property coverage. Personal Liability (Family Liability) usually provides coverage on a worldwide basis, not just accidents which occur at your home. If the home is a rental property and covered by a Landlords Policy, then most likely, the liability coverage is based on a premise only basis. The liability limit of coverage will be found on the policy declarations page.