Auto Liability Insurance: Protecting Your Assets With Thorough Coverage

Too many drivers think that they have done their duty by signing up for the basic auto liability insurance required by the state. What they don't realize is that basic liability does not cover a whole range of situations where a driver could lose a significant amount of the investment that they have made in a car or truck. After all, when you throw down that mountain of cash or credit to purchase nearly any vehicle in good condition, you're buying a large asset that needs protection from harm. A vehicle is on the road, and therefore vulnerable, and additional insurance helps ensure that the investment will not be ruined by an unpaid claim situation.

Basic liability, in many cases, does not even cover damage to your own vehicle. Liability insurance covers what happens to the other driver's vehicle in a crash where you are at fault. It does not always protect the damage for the vehicle of the driver at fault in a claim. Collision coverage provides insurance for when you are at fault, when you wreck into another vehicle and need help fixing your own. Without a collision policy, that comes with an additional price tag, you could spend literally thousands of dollars in body work for just one fender bender.

Gap insurance covers the difference between the value of a car and what you owe on it. For drivers who have bought a car with a long term loan, or have bought a new vehicle that depreciated quicker than they could pay it off, gap insurance "fills in the gap" and provides more complete coverage.

The state's requirements for medical liability often max out at low amounts. One hospital visit from a crash can exceed a $50,000 price tag in some situations. Think about getting an additional medical liability amount to make sure to cover costs of being in a crash.

This kind of supplemental insurance is a little trickier. Drivers who don't understand the finer points of this insurance product fail to see why it is so important. Here's how it works:

A driver gets hit by another driver who has no insurance. The money needs to come from somewhere. The at-fault driver has no insurer. He or she also has no money or assets, and works at a low paying job where garnishing wages would not provide even 1/10 of the cost. That's where uninsured driver coverage comes in. With this product, the "victim" driver's insurance will pay them on the claim.

All of these products help to "hedge" auto insurance to make sure a responsible and conscientious driver does not lose out on a claim. All of them need to be evaluated carefully to make sure that they provide adequate coverage that will truly pay claims for the road ahead.