A Crash Course on Car Insurance for Residents and Medical Students
Paying for auto insurance is something that most of us have to deal with but probably don’t spend enough time on to understand what we’re paying for. Here, we detail the various coverages provided by car insurers.
Types of Automobile Insurance
When you contact an insurance agent, they’ll ask you about your desired limits for several types of coverage. Most people just go with whatever their agents sell them, but you’re a doctor – you’re smarter than that! Here’s a breakdown of the different types of coverage along with tips to help you decide how much you need. Of course, pay attention to your local laws and make sure you have the minimum coverage for your state (your insurer shouldn’t let you go lower than this, anyway).
Property Damage
This insurance comes in to play if you were to damage someone else’s property in an accident. The most relevant form of property is another vehicle in the case of a collision. It also covers any legal fees involved with damaging another’s property.
If you’re driving around Beverly Hills or another locale where everyone is driving Bentleys and Lambos, you’ll probably need several hundred thousand dollars worth of coverage. If you’re in a more average community, you can probably get away with $50,000 – $100,000 in coverage.
Bodily Injury
Bodily Injury coverage comes into play if you cause an accident and the other driver or their passengers suffer bodily injury. This coverage is usually sold in amounts per person and per accident and is quoted as such – 100k/300k, for example, would provide coverage up to $100,000 for each person involved in the accident up to a maximum of $300,000 total for the specific incident.
Since you’re in the medical community, you know how expensive such situations can be and having a decent amount of coverage in this area is probably a good idea.
Medical Payments
Unlike the two coverages detailed above, this coverage is for you and your passengers. It will cover any medical or funeral expenses if you’re involved in an accident and are injured.
If you already have health insurance, this coverage may not do you any good (that’s why it’s usually quoted as a low dollar value coverage – usually around $5000). If you have a high deductible for your insurance, though, you may want to have this coverage to pay that in case of an accident.
Uninsured/Underinsured Motorist Bodily Injury
This insurance covers you in the case that you’re involved in an accident caused by someone with either no or too little bodily injury liability coverage. In that case, this coverage will pay medical bills for you and your passengers. If you’re hit by a vehicle while walking on the street, this coverage also comes in to play if the driver doesn’t have coverage. Similarly to Bodily Injury coverage described above, this coverage is quoted as a per person/per accident dollar value.
This is pretty important coverage and it shouldn’t be skimped. You’ve got a bright future ahead of you, don’t let some bum without insurance take it away! The dollar value here is usually the same as for Bodily Injury liability insurance, but you can make it what you want – it’s relatively inexpensive.
Comprehensive
This covers your vehicle in cases where something other than a collision with another vehicle or stationary object causes damage. Examples of this include theft, fire, hail, wind, or hitting an animal. This type of coverage usually has a deductible separate from your other types of auto insurance.
This coverage may be beneficial if you have a newer vehicle that you would repair in the case of damage. If you have an old beater, it may be more worthwhile to forgo this coverage and instead save some money in the event that your car gets damaged to the point that you need to buy a new one.
Collision
Collision coverage is very similar to comprehensive, but it takes effect when you have a collision with another object. An example of this might be running into a telephone pole or another car. If you’re the cause of an accident, this coverage will pay for the repair of your vehicle.
Again, having this coverage depends on the value of your car and how much you would like to self-insure. If you can afford new car payments or repair bills, you can have a high deductible.
Uninsured Motorist Property
As the title implies, this coverage reimburses you for any property damage caused by an uninsured driver. The most likely example of this coverage would be them hitting your vehicle. If you have collision coverage, this coverage will pay up to the amount of your deductible.
This is pretty cheap, but it doesn’t pay that much, either. It’s a toss up if you should have it or not.
Rental Reimbursement
Just as it’s titled, this coverage will provide a rental car for you if you cause an accident and are having your car repaired. If someone else causes an accident and you have to have your vehicle repaired, their insurance will likely provide you with a rental.
This coverage is usually unnecessary in my opinion. Remember, insurance should only be purchased for things you can’t afford to pay for. Rental cars can be had for around $30/day, so factor that into your decision when looking at the cost of the additional coverage.
Roadside Assistance
If you’re disabled on the roadside, your insurance company will pay up to a given amount to have you towed or for small maintenance activities (e.g., change a flat or charge your battery) to get you back on the road.
If you already have this service through another provider (AAA, new vehicle roadside assistance plan, etc.), don’t pay twice for the same thing. If you’re handy and can fix things yourself, don’t pay for this. If you want to have a little peace of mind, it’s probably not a bad deal. Claims may show up on your CLUE report, though, so maybe AAA would be a better value if you’re concerned about breaking down.
Saving Money
Now that we’ve covered the types of insurance, use the information to help yourself save money on your automobile insurance!
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