Understanding Car Insurance | Craig Swapp & Associates
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Understanding Car Insurance

Auto insurance is required by law for all drivers across the US. Here we’ve broken down the most important aspects of auto insurance, including different optional coverages. This isn’t a comprehensive guide, and you should always contact your auto insurance provider for answers to any questions about your auto insurance policy.

Bodily Injury Liability – Mandatory coverage for any costs associated with injuries or death that you or another driver causes while driving your car.

Property Damage Liability – Mandatory coverage for costs for any damage to another vehicle, or property your car causes while being driven by you or another driver.

Bodily injury liability and property damage liability are the foundations of any auto insurance policy. It is usually broken down into 3 numbers, something like 100/300/50. In this example, if this was your policy, it means that you have up to $100,000 bodily injury coverage for each injured person per accident, up to $300,000 bodily injury coverage per accident, and up to $50,000 property damage per accident.

No one is perfect, so the possibility of causing an accident is real for everyone. The problem arises when your coverage isn’t enough to cover all the injuries or property damage that occurred in the accident you caused. State required minimums are generally very low and would be insufficient if you caused an accident. Check your policy and make sure you have a healthy amount of coverage, 100/300/50 is the amount generally recommended.

Gap Coverage – Optional coverage that kicks in if a totaled car doesn’t pay out enough to cover the loan you took on the car.

Let’s say you’re in an accident in a recently purchased vehicle. Unfortunately, the insurance company determines that your vehicle is totaled. You bought the vehicle with the help of an auto loan. The bad news is that insurance companies will only get you compensation up to what they think the fair market value of your vehicle is. So if you have a $10,000 loan and the insurance company only thinks the fair market value of your now totaled vehicle is $7,000, you will have $3,000 to pay out of pocket for the remaining balance on your auto loan. This is where gap coverage comes in. If you have gap insurance coverage that remaining $3,000 will be covered by your insurance.

Uninsured Motorist Coverage – Optional coverage that reimburses you when an accident is caused by an uninsured motorist, or in the case of a hit-and-run.

Underinsured Motorist Coverage – Optional coverage for the costs accrued when another driver lacks adequate coverage to pay for those costs.

The reality is that there are people illegally driving around without car insurance or are driving only with the state minimums. If you’re involved in an accident caused by an uninsured or underinsured vehicle it’s essential to have these optional coverages to kick in and cover injuries and damages. Review your auto insurance policy and contact your provider about uninsured and underinsured motorist coverage.

Personal Injury Protection (PIP) – Provides reimbursement for medical expenses for injuries to you or your passengers. Changes from state to state, but provides reimbursement regardless of who caused the accident.

Many drivers are unaware that their auto insurance coverage includes PIP. Review your states PIP laws today, to see how much you can be reimbursed if you’re involved in an accident.

If you’ve been involved in an accident because of the negligence of another driver, you deserve fair and full compensation for the damages and injuries you’ve suffered. Contact the experienced attorneys of Craig Swapp & Associates by calling us at 1-800-404-9000 to set up a free consultation or tell us your story by filling out the online form at the bottom of this page.

Craig Swapp & Associates
9980 S 300 W Suite 400, Sandy, UT 84070
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