I am an insurance agent representing many companies in the state of North Carolina. I see firsthand how confusing insurance can be to someone who isn’t in the business. In this article, I’ll tell you about the different types of car insurance coverage, including what’s required and what’s not.
Liability coverage is the only coverage that you must carry in North Carolina. Liability pays other people’s bodily injury and property damage when you, the insured, are at fault. The state minimum is $30,000 per person/$60,000 per occurrence for bodily injury, and $25,000 for property damage.
I always recommend carrying more than the state minimum for liability to my clients. Imagine if you only have $25,000 in property damage coverage, and you run into someone’s brand new BMW, totaling it. $25,000 will not be enough to cover that fancy car, and you will get sued for the rest.
Uninsured/underinsured motorist coverage automatically comes with liability on the policy. Usually, your uninsured/underinsured coverage has the same limits as your liability coverage, but it doesn’t have to. This coverage protects you in case someone hurts you or damages your property, and either doesn’t have enough insurance or doesn’t have any insurance at all. A deductible may apply.
Comprehensive (other than collision) and collision coverage make up what we call physical damage, and are not required coverages.
Comprehensive coverage covers your car for things that are not considered your fault. Fire, theft, vandalism, glass, and animal contact are all covered under comprehensive.
Collision comes into play when you’re in an accident that is your fault. This coverage would pay to have your vehicle repaired.
I always tell my clients that if they hit a deer or other animal and it damages their car, it’s a comprehensive claim and it doesn’t count against them. If they swerve to avoid the animal and hit a tree, it’s a collision claim which does count against them (read: insurance points).
Medical payments are another optional coverage. This would go to pay medical bills for you or anyone in the car with you at the time of an accident, regardless of who is at fault.
There are several other optional coverages that you can add onto your policy. Loss of use would put you in a rental car while your vehicle is being fixed. Roadside assistance is usually very cheap, and means that your insurance company will send someone out to help in the event of a lockout or flat tire. Roadside assistance also covers towing.
Some companies offer additional policy riders such as accident forgiveness. Ask your insurance agent what optional coverages are unique to your company so that you can take advantage of those benefits.