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UPDATED: Mar 13, 2020
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Driving is a rather dangerous activity that results in many deaths each day. Every time you get behind the wheel, there is a chance that you or a passenger in your car may be killed.
There is also a possibility that you may cause the death of someone else in another vehicle or even on the side of the road. The expenses associated with serious injuries and deaths can be tremendous, and you understandably need to know if your car insurance policy will pay for these potential expenses.
Car insurance benefits may pay for some of your related expenses or for the expenses your loved ones may incur if you pass away in a fatal car accident.
However, there are limitations regarding insurance benefits that can affect your personal finances, and you need to understand how your coverage works as a starting point. Some drivers may determine that they need to increase their auto insurance coverage today in order to fully benefit from their policy. Make sure you have the right coverage for your needs with our comparison tool above!
Examining the Different Types of Car Insurance Coverage Available
Most car insurance providers offer three primary types of coverage, and these are liability, collision, and comprehensive insurance. These coverage types offer very different benefits to you and others in different situations.
For example, with a liability coverage policy, insurance benefits can only be used to pay for medical bills, property damage, and other related expenses if you cause an accident. This does typically include death-related expenses.
Because liability coverage does not pay for your own expenses if you are involved in an accident, many drivers choose to purchase additional coverage for added benefits. Some lenders even require this additional coverage for those with a car loan or a lease.
A collision car insurance policy pays for your own expenses in the event of a collision, but it does not pay for expenses related to other types of events. A comprehensive policy is more inclusive, and it includes benefits for auto fires, weather-related events, and more.
Learning More About Bodily Injury Liability Coverage
When many people think about car insurance, they think about getting the insurance company to pay for repairs to their vehicle after an accident. However, many car insurance policies include bodily injury liability coverage as well as personal bodily injury coverage.
These two types of insurance will pay for medical bills, death expenses, and more up to the limits established in your policy.
Limits are usually established on a per person and a per claim basis, and you can easily request higher or lower limits to adjust your premium.
Understanding the Impact of Uninsured Motorists
While all drivers are required to have a minimum level of liability auto insurance in order to drive legally, some drivers do not comply with this law.
Furthermore, they may not have the financial means to pay for the expenses related to a serious accident out of their own pocket. Uninsured motorist coverage is available to compensate you or other passengers in your car that are injured or killed as a result of an uninsured driver.
Determining Reasonable Coverage Limits for Your Policy
It is important that you understand how your car insurance coverage works before you need to file a claim. The law in most areas states that you are financially responsible for damages you cause.
While car insurance benefits may pay for some expenses, they may not pay for all expenses in the event of a serious or fatal collision. Any expenses that are not covered by your policy will be yours to pay personally.
A serious or fatal car accident can result in hundreds of thousands of dollars in expenses in many cases. While the chance of you being in this type of accident is relatively low, insurance is designed to cover all of your bases in a worst-case scenario. With this in mind, it makes sense to set your liability coverage limits on the higher end to enjoy the benefit of a more protective car insurance policy.
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Exploring Other Ways to Pay for Your Own Death-Related Expenses
Buying car insurance is not the only way to pay for expenses related to a serious or fatal car accident. For example, it can be helpful to have a robust health insurance policy as well.
Your health insurance coverage may pay for medical expenses for you and your loved ones covered by the policy who were injured in the accident, but it will not pay for any liability-related medical expenses. When selecting a health insurance plan, keep the possibility of a serious car accident in mind.
Buying life insurance is not something that most people want to do, but it nonetheless is one of the best steps that you can take to prepare for the future.
Consider buying a reasonable amount of life insurance for you and your loved ones. These benefits can be used to pay for funeral expenses, lost wages, and other expenses in the event one or more individuals pass away because of a car accident or any number of other causes.
Some insurers provide a bundled policy discount if you purchase two or more different types of coverage through the same company. While this is not usually an option with health insurance, it may be an option for your auto, life, and home coverage. This is a great way to save money while getting the beneficial coverage you need.
Why You Need to Update Your Coverage Periodically
Your needs for different types and amounts of auto coverage can change from time to time. For example, these are some of the factors that may cause you to adjust your coverage types and limits:
- A more or less inclusive health insurance plan
- A change in your personal financial situation
- Grown children moving out of the house
Updating your auto coverage sounds time-consuming, but the process usually only takes a few hours to complete.
The Benefit of Choosing a Reputable Insurance Company
Before you can request quotes for the updated coverage that you need, you need to find a few excellent car insurance companies to get quotes from.
Focus your attention on their reputation for having an easy claims process as well as their financial strength, and use the Internet to conduct research. If you plan to bundle policies, you will need to get quotes from insurance companies that also offer life or home insurance plans.
Saving Money on Your Premium
Upgrading coverage may cause your car insurance premium to rise, but there are a few strategies you can follow to keep this expense to a minimum. These ideas include:
- Prepaying your premium in full or setting up automated payments
- Maximizing the benefit of various insurance discounts
- Bundling your coverages
Enjoying a Fully Protective Policy
To set up a car insurance policy that is fully protective, you must learn more about the potential expenses that you may be responsible for if a serious accident occurs.
For example, the funeral cost for a single individual may be $15,000, $20,000, or more. An individual may be hospitalized for several weeks before succumbing to accident-related injuries, and tens of thousands of dollars of medical bills may accumulate. Furthermore, there may be up to five or seven passengers in a single vehicle.
You also need to think about vehicle repairs. While your own vehicle may need to be repaired, you may also hit a high-end, luxury car that needs to be repaired or replaced. Your insurance limits should reasonably cover most higher-end vehicles on the road.
It can be difficult to accurately determine how much car insurance you need to buy, but your insurance agent can assist with this process. Nobody wants to be in a disastrous situation where they are responsible for hundreds of thousands of dollars of expenses with no way to pay for them. Now is the ideal time to prepare for this possibility by updating your care insurance types and limits.