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Car Insurance and the Best 10 Insurance Tips and Overall Coverage That You Need to Know

What Is Car Insurance ? And Types Of Car Insurance

You got the keys, you're ready to go? Wait. Do you have insurance? What is insurance? Today we're going to go over the best insurance tips and overall coverage that you need to know. This is the 101, the bible of insurance.

Now, keep in mind, the disclosure is the same. So I don't know exactly what state you're in, whether you're in New York versus Michigan versus Florida, and we may talk about those throughout this article, but there are unique things about each state.

But this is kind of the generalized version and way of how insurance works. At the end of the article, I'm actually going to go ahead and show you some examples and some recommendations of some things that I would lean towards and another article that you should look into that will give you some more advice going forward.

types of car insurance

types of car insurance

car insurance usa for foreigners

car insurance usa for foreigners

Reasons to buy insurance

That being said, the essential reason that you buy insurance is to protect yourself. You have assets to protect or future income to protect. So the biggest way to understand that what you're trying to do is you're trying to make sure that your insurance company has more money than you.

And so if your income is here and you own your home, you own your assets, whatever the case is, your level is here. You want to have your insurance company just a little bit richer than you are financially.

So that way, if something does happen and they're going to sue somebody, they don't sue you, they sue your insurance company instead. So if you've got a pen and paper, we're going to dive in. There are three primary pieces to insurance.


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So it's called 1020 or 100th. 300. I commonly do the 200 and $5500. What that means is that $250,000 will cover that person's medical if you injure them up to $250,000 per person. Now, if there are multiple people in the car, let's say there were three people in the car, a driver, a passenger, and someone in the back, and they all were injured, as long as you don't go above 250,000, they're covered.

Under your policy for that accident. Keep in mind, you have the 500,000 per accident total aggregate limit. And that means that if these three people, even though they're under that $250,000 if any of them altogether collectively is over 500,000, it cuts off there as well.

So this person could have 100,000, this person could have 200,000, and this person could also have 300,000. So the one plus the two is $300,000.03, is $600,000. They're all individually covered, except this person is cut off for that per person by $50,000.

That's a common one for Florida if you want a statement. Eight minimums. So it's 10,000 per person, 20,000 per accident. If there are three people in the car and they all had $10,000 worth of medical.

car insurance

car insurance

Covered, covered, covered. Ten 1010. You didn't max out the per person, but the per accident, you did max out. So that 20,000 will be $10,000 short, and you have to out pocket that. Or if you don't have the money, they're going to have to to you some sort of way to recoup that income or that loss that they sustained.

And if you don't have the money today, they can take potential future income. The second part for coverage for others is property damage. And that's essentially the same thing. But for someone's car, if you damage their car, their property, then that's going to cover that.

If you hit a house, if you hit their garage, if you hit their vehicle, whatever property that you damage, you're going to pick a limit. So a common one that a lot of people start with is what we call 25.

50. 25, that's 25,000 per person, 50,000 per accident. That's medical for others. And 25 is that property damage to their vehicle. And that's really the basis of where people start. You can go lower.

In some states, it's not recommended because it really isn't a benefit to anybody. But that's coverage for others. So that doesn't actually cover anyone in your car. That's just the bodily injury for other people that you hurt.

Well, what about the people in my car? Well, you can pick up a couple of things. There's something called medical payments, Med pay, and that's coverage for anybody in your car. It's per person. So if you have four people in the car, each person gets that coverage.

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