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How to Choose Auto Insurance to Cover a Major Accident

Updated on March 19, 2013

Why Every Driver Needs Car Insurance

If you are currently shopping for automobile insurance to cover a major accident then you need to do a little homework. Buying the right coverage isn't always about the price, it's always about buying the right protection for your needs. In order to do that you'll need a basic understand of what insurance coverages are available to determine which one is right for you.

Minimizing your risk isn't the only reason to purchase auto insurance although it's a good reason. In some states auto insurance is mandatory. If you get stopped by a police officer and don’t have it, not only will have to pay the fine associated with the traffic violation you may have broken, you’ll also pay a penalty for not having auto insurance. Those costs can really add up, but those costs are nothing when you have to cover the cost of a major car accident.

Auto accidents are expensive. A 2008 AAA report revealed that auto accidents cost American motorists $164.2 billion per year! That’s more than $2000 per person. Additionally according to AAA a motor vehicle accident occurs every 14 seconds in America. If you are looking for auto insurance to cover a major accident then you’ve come to the right place.

Protect Your Most Valuable Assets

Source

What Is a Major Car Accident?

One or more of the examples below occur when a driver or drivers are involved in a major auto accident;

  • Cars are totaled
  • Property is damaged
  • People are injured
  • People die

Here are few examples of financial losses that could occur as a result of major car accident;

  • Loss of income due to time off from work due to recovery
  • Hospital and doctor office bill visits
  • Burial expenses
  • Car and property damage repairs
  • Lawsuits or other judgments if found at fault

If you want to avoid the financial hardships associated with a major accident then your automobile policy should include the following;

  • Collision and Comprehensive coverage
  • Personal Injury Protection
  • Medical Payments
  • Liability coverage for body injury, property damage underinsured/uninsured motorists

The above type of policy should protect you from some of the common auto accidents associated with major accidents below;

  • Alcohol-Related Crashes
  • Cellphone Use
  • Drunk Driving and Speeding
  • Distracted Driving – Texting, Eating, Combing Hair, Applying Make-Up
  • Running Red Lights
  • Sleep at the Wheel
  • Speeding

Source

Types of Auto Coverages

Type of Coverage
What It Covers
Comprehensive
Damage to your vehicle that is not involved in a collision like fire, theft, hail, wind
Collision
Damages to accidents that you caused
Personal Injury protection
Medical and other expenses resulting from an automboile accident
Medical Payments
Limited coverage driver and passengers medical expenses as a result of an auto accident
Bodily Injury and property damage liability coverage
Damages if you injure someone or his property in an auto accident
Uninsured and underinsured motorist liabilty coverage
Damages if you're in an accident with another drivere who doesn't carry any or ennough liability coverage
Source

Suggested Limits for Liability Coverage

Liability
Limits
Bodily Injury
$100,000
Property damage
$100,000 per person, $300,000 per accident
Imomsired/Underinsured motorist
$100,000/$100,000
Source

Remember when purchasing auto insurance or any insurance for that matter to stay true to your financial goals. The main reason many people buy auto insurance is to minimize or transfer the risk of a loss that they can't afford to pay their your own. The example shown above is only a guide to illustrate features of policy that will cover most major car accidents. Keep in mind everyone is different. In our office we treat buying auto insurance with the same level of seriousness as we treat planning for a college or retirement because both can be costly and making the wrong choices can have negative consequences. Take the same care with your own financial planning. Consult with your financial professional or insurance agent to determine which benefits and policy features are right for you.

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    • everymom profile image

      Anahi Pari-di-Monriva 4 years ago from Massachusetts

      Voted up and useful! Thanks, Princess! I am going to be in the market for new insurance before the end of the year, and I will definitely refer back to this article!

    • livelifeworryfree profile image
      Author

      Princess Clark 4 years ago from The DMV

      Thanks for stopping by Anahi and all the best on your new insurance purchase!

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