Mississippi also does not require vehicle owners to purchase insurance, but the state offers an option to post a bond or make a security deposit as replacement. In all other states, auto insurance is mandatory as a form of financial responsibility of owning and driving a car. Within the scope of financial responsibility, most states only require drivers to purchase one type of auto insurance coverage: Liability Coverage.
As the name suggests, Liability Coverage refers to the financial protection that covers the expense of being liable for road accidents. It means when policyholders are at fault in an accident, resulting in physical injuries to others and property damage, their insurance policy dictates that insurer must help them to pay the cost of someone else’s medical expense and repair or replacement for others’ properties. The idea behind Liability Coverage is to protect people from policyholders’ recklessness when driving. Liability Coverage consists of two different parts including:
1. Bodily Injury Liability: financial protection to cover someone else’s medical expense. If an accident makes someone else (other drivers, pedestrians, cyclists) to sustain injuries, policyholders must help cover the medical expense including therapy and recovery. Financial protection from the insurer is up to the limit of the coverage.
2. Property Damage Liability: similar to Bodily Injury Liability, but the financial protection is to cover the cost of property repair or replacement. The limit also complies with rules in the insurance policy.
Some companies offer those basic types of coverage, but many also provide additional protections. Loya Insurance Company stipulates that primary liability coverage and several optional ones for complete protection. In every state where auto insurance is mandatory, there are regulations to determine the minimum limit of protections. In other words, it is the price for purchasing insurance. If the minimum limits are $25,000 for Bodily Injury and $10,000 for Property Damage, those are maximum amount the insurer can give following an accident.
Finding Good Insurance
Similar to choosing other items for sale, buyers must consider brand recognitions. There are numerous insurance companies, from small local insurer to international scale ones, which sell and underwrite auto insurance policies across the country. Important traits to look for in a company are as follows.
• Good reputation: company history and track records including complaint ratio. The state Department of Insurance is a good place to find whether an insurer has a good reputation and good records on claim settlements.
• Local: the presence of insurance company’s office or branch offices in local area means easy accessibility and open line of communication. Some companies have huge office buildings, but it is in distant locations reachable after hours of driving. Loya Insurance Company is an excellent example of an insurer that focuses on being a local company by making hundreds of branch offices in more than a dozen of states. It is an indication that the insurer tries to attract more loyal insurance customers, but without using aggressive nonsense advertising. It penetrates through the center of the community to provide easy access for both existing and potential customers.
• Coverage options: the vast majority of states require Liability Coverage, but few of them use a different set of rules that eliminate the needs for Bodily Injury Liability. These rules go by the name “No-Fault” Insurance. In those states, Bodily Injury is not necessary because each driver must take responsibility for their mishaps. Regardless of who is at fault, the insurance company can provide financial protections for injuries via Personal Injury Protection coverage. Because each driver has one, there is no need for Bodily Injury.
Flexibility in providing coverage is a sign of good company too. Loya Insurance Company has the license to sell and underwrite insurance policies in multiple states, meaning auto insurance applicants always get policies that comply with the rules, regardless of where they live.
Optional Coverage
Non-mandatory types of coverage are also available. They are complementary and optional protections policyholders can purchase. The availability of optional coverage depends on the company; some provide a broad range of them while others only offer the basic mandatory types. As an example, Loya Insurance Company allows policyholders to purchase more coverage such as:
• Collision: while Property Damage Liability is useful to cover the expense of repairing someone else’s vehicle, Collision coverage gives the protection for policyholders’ cars. An agreement of protection limit is subject to discussion between the company and policyholder.
• Comprehensive: protection for vehicle damage due to non-accident causes for examples vandalism, theft, fire, natural disasters, and falling objects. All insurance perils that fall under the protection of Comprehensive coverage are available in the policy.
• Medical Payment: it is separate coverage from health insurance. However, both are usable to cover the medical expense. In many cases, Medical Payment applies when Personal Injury Protection coverage exceeds its limit.
• Rental Reimbursement: financial assistance to provide rental car when policyholder’s vehicle is immobile due to damages.
Insurance companies have many different methods to attracts new applicants and keep healthy relationships with the existing loyal insurance customers. The good thing is that auto insurance makes a very competitive market, and there is the tendency that insurers lower the price for coverage and offer various discounts.
