Auto insurance policies are built from several moving parts, and it is easy to feel unsure about what each one actually does. Whether you are insuring a daily commuter car or a second vehicle for a teen driver, understanding the basic building blocks can help you have a more informed conversation about your policy. Here is a plain-language look at what typically makes up an auto policy in New York.
Collision and comprehensive coverage
Collision and comprehensive coverage both deal with damage to your own vehicle, but they cover different situations.
Collision coverage applies when your car is damaged in an accident, whether you hit another vehicle or an object like a guardrail or tree.
Comprehensive coverage, sometimes called other than collision coverage, applies to damage from events outside of a crash, such as fire, theft, vandalism, falling tree limbs, or flooding.
If you are still financing or leasing your vehicle, your lender will often require you to carry both of these coverages.
Both typically come with a deductible, which is the amount you pay out of pocket before coverage kicks in. Deductible amounts can vary quite a bit from policy to policy, and choosing a higher deductible generally lowers your premium, while a lower deductible raises it. It helps to think through what you could comfortably pay out of pocket after an accident before settling on a deductible.
Liability coverage
Liability coverage is the part of your policy that responds when you are found at fault in an accident. It helps pay for injuries to other people and damage to their property.
This is generally considered the core of an auto policy, since it protects your assets and finances if you are responsible for an accident that harms someone else or damages their vehicle or property.
Medical payments coverage
Medical payments coverage helps pay medical bills for you and your passengers after an accident, regardless of who caused it, up to the limit on your policy.
If everyone who regularly rides in your car already has their own health insurance, you may want to discuss with us whether this coverage still makes sense for your situation.
Personal injury protection
New York requires personal injury protection, often called no-fault coverage, on auto policies. This coverage is designed to pay for medical and rehabilitation costs, certain replacement services, funeral expenses, and a portion of lost income if an accident leaves you unable to work.
Because the details and limits of no-fault coverage can change, it is worth confirming current requirements with us when you review your policy.
Uninsured and underinsured motorist coverage
Not every driver on the road carries enough insurance, or any insurance at all. Uninsured and underinsured motorist coverage steps in when you are injured by a driver who has little or no liability coverage, or by a hit-and-run driver who cannot be identified.
Given how common these situations can be, many drivers choose to carry this protection even though it is not always required.
Optional extras
Beyond the core coverages, policies often offer optional add-ons such as towing and labor coverage, rental car reimbursement, and roadside assistance.
None of these are required, but they can be worth considering depending on how you use your vehicle and how much of an inconvenience a breakdown or accident would be for your daily routine.
Finding the right level of coverage
There is no single formula for how much coverage every driver needs. A few questions can help guide the decision.
How much do you have in savings, property, or other assets that liability coverage would need to protect? What is your vehicle currently worth, which affects how much sense collision and comprehensive coverage make? How much could you realistically pay out of pocket if you had to meet your deductible? And how comfortable are you with financial risk in general?
Coverage limits, deductible options, and state requirements can change over time, so it is a good idea to revisit your policy periodically rather than assume it still fits your situation.
If you have questions about any part of your auto policy, or you simply want a second look at your current coverage and deductibles, the team at Flynn Insurance Agency in Kings Park is glad to sit down with you and walk through your options.
This article is general information, not legal, tax or financial advice. Coverage depends on the terms, conditions and exclusions of each policy. Talk with a licensed agent about your situation.
