by Matthew Knuth

Created on: July 11, 2009

In such a competitive market, it is difficult to separate the best deal from the right deal. Many companies will offer you big money savings. This tactic does not always include what is the best choice for you. As a licensed professional with five years experience, I have come across many situations where an individual or family was not educated on their policy coverage. It is unfortunate when this happens. It can simply be avoided by honest business practices and understanding the basics of a policy. Insurance policies break down into three basic parts: the portion that protects others when you are at fault, the part that protects you and your passengers, and the part that covers your vehicle.

Liability to others- This is the section of coverages that will cover medical costs of others that you injure in an accident. Liability also covers the cost of repairing the others vehicles that are damaged in an accident. These coverages will commonly break down in a three category form. This will show a per person payout amount for medical, a per accident payout amount for medical, and a per accident payout for property damage. A common format may look something like this: 100/300/50. It is important to carry the right amount of coverages here. It is often a misconception that it is a major difference in price to carry higher limits. This is not correct in most cases. You must keep in mind that if you do not carry high enough limits of liability then an injured party may come after your assets to satisfy their loss. To translate this basically, if you are a home owner and you carry low limits a victimized party may come after your home to collect on what is owed. State minimum coverage is typically not the best option and not the most cost effective option.

Protection for yourself and others- This portion of insurance coverage can help protect your and other drivers on the policy with extra medical coverage. It will also protect passengers in your vehicle with medical coverage as well. This can be a diverse category of coverages depending upon what state you live in. It typically consist of some type of medical coverage, most commonly called medical payments, and uninsured/under-insured motorist coverage. Medical coverage is something that is typically is purchased to supplement your current medical coverage or replace it completely. Uninsured and under-insured motorist coverages will pay for medical cost when you are injured by an at fault driver that does not carry

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