David Greene from the law firm of Greene and Phillips says buying car insurance can be complicated, so he wants to break it down for you. He says the only thing required by law in the State of Alabama is a 25,000/50,000 liability policy. If you cause an accident, this would cover the $25,000 worth of property damage to the other car and $25,000 per passenger for medical costs of a car accident victim. The $25,000 means the insurance company will cover up to $25,000 per person and $50,000 is the total amount the insurance will cover for all the injured victims per incident. This does not cover you or your vehicle however.
Since 25/50 only covers the most basic accidents, he suggests getting 100/300 if you can afford it. He says it’s not all that much more expensive, and could even be less that $10 a year extra. If you run into and total a $40,000 vehicle and only have $25,000 in property damage coverage, you’ll be responsible for the remaining $15,000. That’s why if you can up your policy to a 100/300 policy, you can really protect yourself.
Comprehensive insurance covers damage or theft to your vehicle resulting from things not related to a collision. Some things covered by comprehensive include: theft, vandalism, fire, natural disasters, falling objects, damage by animals, civil disturbances. David says he has an employee who only had liability insurance and had one vehicle stolen and another vehicle smashed by a tree limb. Because he did not have comprehensive insurance, he had to pay out of pocket for replace both vehicles. The higher your deductible on this will give you a lower rate, but remember, if your vehicle is damaged and you have a high deductible, you’ll need to be able to pay that amount of the damages before your insurance covers the rest of the cost.
If you are in an accident and you are partially or fully responsible for the accident, collision insurance will pay for repairs to your own vehicle. But he says adding Uninsured Motor Vehicle coverage to your policy is the most important. If you get hit by a vehicle without insurance or not enough insurance, this will cover you. He suggests keeping this at the same level as your liability insurance. It can be as low as $4 extra a month and it’s very valuable.
Medical Payments, also known as Med Pay covers your medical expenses if you are injured in an accident. If you already have really good health insurance with a low deductible, you may not want this. If you have a high-deductible health-care plan, however, you likely do want it so you don’t have to worry about out of pocket medical expenses after you’re involved in an accident.
He says emergency roadside assistance is also good to have, and it can be as low as $6 a year. And having rental car coverage is good because if your car is in the shop, you need a way to get to and from work. Having a car rental policy can help with the expense of renting a car while yours is getting fixed. If the other drive is at fault, they will often pay for that expense.
Greene and Phillips
50 North Florida Street
Mobile, AL 36607