III Stresses Importance of Appropriate Auto Insurance Coverage

Car with broken fender

The Insurance Information Institute (III) is advising motorists that the minimum auto insurance coverage limits mandated by lawmakers may not be enough to protect a policyholder in the event of a serious accident.

Both consumer groups and the industry recommend drivers have at least $100,000 of bodily injury liability protection per person, and $300,000 per accident, according to the III.

Motorists should also consider other types of coverage offered by insurers.

For example, collision auto insurance will cover the costs associated with an accident involving another car or object. It also provides for damages associated with flipping a vehicle or hitting a pothole.

How collision works is partially determined by whether the policyholder was deemed at fault for an accident. If he or she was not held responsible, their provider may try to collect the funds that they have paid out from the responsible party’s insurer. Meanwhile, in most cases, an at-fault driver’s company will cover his or her damages, minus their deductible.

Comprehensive policies cover many of the other scenarios a consumer may encounter. It provides protection against losses associated with theft, fire, vandalism or natural or weather-related disasters. The III said it will also pay for shattered or cracked windshields.

While some consumers may heed this advice, others might not, meaning they may not have sufficient coverage. As a result, drivers may consider purchasing a policy that includes protection against uninsured and underinsured motorists to cover expenses arising from being involved with a driver who is not insured or has low liability limits that aren’t enough to pay for injuries or damages sustained.

III’s senior vice president, Jeanne Salvatore, noted that it is important for consumers to look over their policies. If they don’t understand something, they should take the time to contact their agent or company.

“It is important that you understand what is and is not covered by your policy, as well as how much insurance protection you have,” Salvatore said.

New regulations recently put into effect in Wisconsin leaves New Hampshire as the only state that does not require a minimum amount of coverage. Other states, such as Pennsylvania, have actually considered increasing legally mandated liability levels.

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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