Auto Insurance

A. What is auto insurance?

Protection against financial loss if you have an accident involving a vehicle Legally liable – to be at fault for an accident If you don’t carry insurance to cover

accidents that you cause – people can and will sue you for personal belongings & assets

B. Six Types of Coverages

1. Bodily injury liability

2. Property damage liability

3. Medical payments (also called Personal Injury Protection or PIP)

4. Collision

5. Comprehensive

6. Uninsured/underinsured motorist coverage

1. Bodily injury liability

Covers medical injuries that you cause to someone else

Does not cover your medical injuries

2. Property damage liability

Covers damages that you cause to someone’s personal property

Includes other vehicles, lamp posts, telephone poles, fences, landscaping, buildings, etc.

Does not cover your vehicle’s damages

3. Medical payments (Personal Injury Protection or PIP)

Covers treatment of medical injuries to you, the driver and passengers of the car (regardless of who is at fault)– Medical payments– Lost wages– Funeral costs

If in an accident with someone & it is their fault – their bodily injury liability should cover your medical injuries before your PIP kicks in

Covers as pedestrian if struck by a car on a public road

4. Collision

Covers damages to your car resulting from:– a collision with another car or object (except

animals)– flipping over– potholes

Usually contains a deductible which is per accident

Your fault – insurance will pay minus your deductible

Someone else’s fault – their property damage liability should cover your vehicle’s damages

5. Comprehensive

Covers loss to your vehicle due to theft Covers damages to your vehicle caused by

other than a collision, such as:– Hail, fire, earthquake, explosion, contact with

animals, windstorm, vandalism, etc. Usually contains a deductible which is per

accident May also cover when windshield is cracked or

shattered

6. Uninsured/Underinsured

Uninsured: covers your medical injuries when you (or a member of family or driver with permission) if hit by an uninsured or hit-and-run driver (not your fault)

Underinsured: covers your medical injuries when at-fault driver does not have enough insurance to pay for losses; also covers you when you are hit as a pedestrian

Only covers medical injuries not damages to vehicle

Bodily injury liability Property damage liability Medical payments or PIP Collision Comprehensive Uninsured/underinsured

Full coverage (all 6 types)

Bodily injury liability Property damage liability

Liability coverage

NO! Most states require drivers to have minimal amounts of liability insurance

When you purchase a car with a bank loan – most will require you to have full coverage

C. Can you legally drive without insurance in the state of Iowa?

Liability insurance: expressed as three numbers in thousands

Iowa’s minimum - 20/40/15 1st number: bodily coverage of 1 person per

accident 2nd number: bodily coverage of more than 1

person per accident 3rd number: property damage of accident per

accident