Consider this post a take on the summer beach reads. Okay, not quite a page turner, but if you are a driver, then this is information you should know. All drivers must have insurance - it is Washington state law - so if you're paying for it anyway, you might as well know what you're buying. Here's a primer on auto insurance policies.
You can think of it as six separate policies, because auto insurance policies are divided into as many parts. Some of these parts are required by the above-mentioned state law. Some parts are optional but quite possibly a good idea to include. Before you buy a policy, you should consider each part and think about how much coverage you might need. Each part of the overall policy has its own premium, which you add up all together and end with the total you'll pay to the insurer for your policy, either by month or twice a year.
Bodily injury liability (BI) covers you in case you cause an accident where someone is hurt or dies. Washington's law mandates that BI must be included in every driver's car insurance policy, and establishes these minimum limits:
- $25,000 for injuries or death to another person
- $50,000 for injuries or death to all other people
However, those amounts are likely to be quickly used up in many types of car accidents. Experts recommend all drivers carry a minimum of $100,000 per person and $300,000 per occurance - commonly expressed as "100/300." If you can afford it, a higher BI coverage will help protect your assets.
Property damage liability (PD) coverage covers you when you damage someone else's property. Most often this coverage applies when you've hit someone else's car, but it also includes damage you've caused to buildings, utility poles, garage doors, or perhaps someone's living room. In Washington, this minimum coverage requirement is $10,000. Again, that's not going to go very far if you seriously damage someone else's property.
Collision coverage helps foot the bill if you run into another vehicle, or some object such as a wall or utility equipment (i.e. a fire hydrant). Washington doesn't require collision coverage, but some banks will require it if you have a loan on the vehicle's purchase. The deductible amounts run the gamut, so you can choose what you want to be responsible for paying out-of-pocket before the claim insurance would come in.
Comprehensive coverage covers you in case your car is stolen or damaged in ways that don't involve a collision. These are things like weather-related damage (i.e. hail, flood, earthquakes) and theft, fire, explosions, and encounters with wildlife, such as deer. This type of coverage is optional, but check with your bank if they require it as part of your loan. Like collision coverage, it's up to you to determine the amount of the deductible on this part of your policy.
Uninsured/Underinsured motorist (UM/UIM) is an important aspect of your policy to consider as well. It covers medical and other expenses when you are hit by a driver who doesn't have enough coverage to pay for all the injuries and damage. Washington state law doesn't require drivers to carry this coverage, but it does require insurers to offer it to every driver. Here are some more thoughts on why it's important to include UM/UIM coverage on your policy.
Personal injury protection coverage (PIP) is no-fault insurance, and covers you no matter who was at fault. It's not required, but a good idea to carry it. I've got a YouTube video on PIP for more info on this type of insurance coverage.
A word to the wise: there are penalties for driving without insurance if you so choose to risk it. In Washington, officers can tell if you don't have insurance coverage simply by scanning your plate. If you can't prove otherwise, you'll have to go to court and show evidence of your policy. If you can't do that, then you can be convicted of driving without insurance. The fine will be at least $550 plus court costs and fees, and a lot of headache for all involved. Since you don't want to skip buying a policy, here are some ways to save on your auto insurance policy.