What You Need to Know About Insuring Your Car
In order to drive your automobile on the roads in Georgia you are required to have it insured. The only insurance you must have is liability insurance. The minimum limits of liability insurance you are required to have are $25,000.00 per person/$50,000.00 per accident. This coverage provides a source of recovery for the damages that someone may sustain in the event that you cause an accident. If you have worked hard and accumulated assets during your lifetime, you should purchase increased liability coverage to protect the value of those assets in the event that you cause an accident and are sued. Most liability insurance carriers offer limits substantially above the minimum required by Georgia and some offer excess or umbrella coverages in amount exceeding $1,000,000.00. The costs vary from insurer to insurer so it is best to compare various companies, taking into consideration their claims handling practices.
In addition to liability coverage, you can also purchase for additional premiums the following coverages: Comprehensive, Collision, Uninsured Motorist and Medical Payments, Rental Reimbursement, and Gap Insurance.
Comprehensive coverage will insure your vehicle for fire, theft, vandalism and such things as contact with animals or falling objects.
Collision coverage will pay for the damage your vehicle sustains in an accident even if the accident is your fault. This coverage should be carried on all new cars and on older cars until the fair market value of the vehicle has decreased to the point that it no longer is a good value to maintain the coverage. When leasing or financing a vehicle this coverage is generally required.
Uninsured Motorist coverage is something I advise all my clients to purchase as much as they can afford. This coverage provides protection to you and those in your household in the event that the person who caused the accident in which you were injured has no insurance or not enough insurance. Where liability coverage provides protection to those you may hurt, uninsured motorist coverage provides protection to those that hurt you.
Medical Payments coverage is something I advise all my clients to have. If you have no health insurance you should have $25,000.00 - $50,000.00 of this coverage since medical expenses in any serious accident add up very quickly. If you do have health insurance, I recommend either $5,000.00 or $10,000.00 since this would cover most copays and deductibles for policies as they are now written. This coverage is usually not very expensive and covers you, the members of your household and those in your vehicle, for the costs associated with treating injuries that are sustained in a motor vehicle collision.
Rental reimbursement coverage will provide a rental vehicle to you in the event of a collision for the number of days and amount you agree to purchase. This is very helpful if you do not have an extra vehicle in those cases where it takes some time for the at fault party’s insurance carrier to accept responsibility for the collision.
Gap coverage should always be purchased for new vehicles or anytime you pay more for the vehicle than accepted fair market value. In all car wreck cases, the at fault party is only required to pay the reasonable cost of repair or the fair market value of the vehicle, whichever is less. Generally an insurer is going to determine the car is a total loss if repair costs exceed 75% of the fair market value. If you owe more money on your car loan than the fair market value you would have no remedy if you did not have gap insurance. Most companies that finance the purchase of vehicles will require that you have this coverage.
