Volume 2, Issue 11                    The Traut Firm eNewsletter              October 2007            www.trautfirm.com

The ABC's of Automobile Insurance (Part 1)

Learning The Basics

Chances are you’re spending hundreds, maybe even thousands of dollars on auto insurance every year. When you stop to consider what a sizable part of your budget is spent on auto insurance, it makes sense to spend some time learning the basics. While not a detailed explanation of your auto insurance coverages, this guide is designed to help you make informed coverage decisions.

What if, while driving your car, you cause an accident which results in extensive property damage and serious injuries to yourself and others? Do you know for certain that your auto insurance coverage would pay for most medical expenses, repair bills, lawsuits and court costs? Having the right coverage can eliminate or substantially reduce the risk of losing you life savings, as well as the probability of financial ruin and heartache for you and your family.

Liability Coverages

Liability coverages are among the most important in relation to your financial security. In the face of ever increasing medical costs, the possibility of a multiple car accident, or damage to expensive property, the minimum coverage limits required by law may not be enough. Choosing low liability limits could be an unwise way to save on insurance.

Bodily Injury Liability

Bodily injury liability coverage applies when, through the use of an insured auto, you (or another insured person) injure other people – such as pedestrians, passengers in your car or people in other vehicles. If injury claims or lawsuits are brought against you, bodily injury liability coverage generally provides for your legal defense. Also, if you are found legally liable, this coverage pays the damages assessed against you up to the dollar limits in your policy.

Property Damage Liability

If you caused an accident and damaged someone else’s car, how would you pay for the damages? Suppose you caused damage to a telephone pole, a light post or a building? Property damage liability coverage applies in these situations. Property damage coverage does not pay for the damage to your property, but pays, up to your policy limits, for the damaged property of others. If claims or lawsuits are brought against you, property damage liability coverage provides for your legal defense. And if you are found legally liable, this coverage pays the damages assessed against you up to the dollar limits in your policy.

Financial Responsibility

California’s Financial Responsibility Law requires minimum auto liability coverage limits of $15,000 per person, $30,000 per accident for bodily injury, and $5,000 for property damage. You can, and should, get higher coverage limits. Or, if you’d like more coverage than what your auto insurance policy offers, an “umbrella” type policy may fit your needs.

Medical Payments

Medical payments coverage pays for medical expenses, no matter who’s at fault, if you and/or occupants in your car are injured. It also protects you and relatives living in your household if injured in someone else’s car, or by a car as pedestrians. All reasonable and necessary medical expenses are covered up to the amounts and within the time specified in your policy. This coverage is valuable if you do not have health insurance because payment will be made while liability is being determined.

If you ever have questions about your automobile (or homeowners) insurance, call James or Eric at (714) 835-7000. Consultation is free. There is no fee unless and until you win your case.

The Traut Firm
"When You Mean Business"