Insurance 101: How to Read a Declarations Page

Insurance is often one of the largest bills you pay every month. Today, we will tackle how to read your coverages, what your coverages mean, and try and clear up some common misinformation we see far too often. Coastal Alabama Insurance is here for your 101 needs.

After you pay your mortgage, car note, student loans, taxes, and maybe another monthly bill or two, insurance for your home, automobile, and possibly life is probably your next largest bill, but some of us haven’t a clue what we’re paying for. This blog will speak about your auto insurance.

Bodily Injury– Most states require what we call 25/50 minimums (here’s looking at you Louisiana, you antiquated state with 15/30 minimums, stuck perpetually in 1985). That requires the minimum liability you can carry at $25,000/$50,000 for bodily injury you can carry on your insurance should you be liable for an accident. However, we recommend a minimum of $100,000, as with everything in our blessed nation, the prices of everything continue to rise, and the cost of an ambulance ride often eats up close to the state minimums. The second number ($50,000) indicates what your insurance would cover for the totality of the accident. 

Property Damage– This number is often matched with the first number in your liability. The state minimum for this is $25,000 ($15,000 in Louisiana). The average price of a new car exceeds the state minimum, and we again recommend $100,000. The difference in costs between $25,000 and $100,000 in liability is often a couple of dollars a month.

Uninsured/Underinsured Motorist Coverage– This coverage is used in the event of an accident that is caused by someone without insurance or without enough insurance to cover their liability (ie someone with state minimums). It is estimated that 20% of vehicles on the road are without insurance, and that an additional 30% of insured carry state minimums. At Coastal Alabama Insurance, we write uninsured motorist coverage with every policy we issue.

Collision– The common deductible is $500, and this indicates the amount you will pay before insurance kicks in. This coverage is set up for the event of a collision with another car or object.

Comprehensive– The common deductible is $500 as well, and this coverage is for anything else that can happen to your car that does not involve a collision (fire, flood, theft, hit with an animal, vandalism, hail, etc).

Rental Reimbursement– This coverage is used when your car is in the body shop after an accident, or your car is unusable from a comprehensive claim, and will pay for your use for a certain amount of time. Usually capped at 30 days.

Towing/Roadside Assistance– This coverage is used when your are broken down, need a jump from a dead battery, lock your keys in your car, etc, and need some help. This coverage is often less than $1/month, and we include it on every policy.

Please let us at Coastal Alabama Insurance be your personalized shoppers for your insurance needs and save you money today.