Military Auto Insurance

TYPES OF COVERAGE
Military Auto Insurance Options

Auto insurance is a necessity - and for you in the military, deep discounts are readily available. Still, many military people buy their auto insurance purchase policies before understanding what coverage they really need.

Even with your military auto insurance discount, your premiums (the payments you make to purchase coverage) can vary by as much as 300 percent, depending on the company and insurance products you choose.

Understanding how basic auto insurance applies to your military lifestyle can add up to hundreds of dollars saved on your annual auto insurance premiums, while still protecting you fully in case of accident, injury, or theft.

What kind of auto insurance do you need? A little knowledge goes a long way.

Auto insurance companies offer many different types of coverage. And most states require drivers to purchase a minimum amount of certain types of coverage. Here are brief descriptions of your coverage options for auto insurance:

BODILY INJURY LIABILITY COVERAGE

This may be the most important type of auto insurance coverage to carry. Bodily injury coverage pays for medical bills, lost wages, rehabilitation, treatment, and/or funeral costs for anyone injured or killed by your car. Bodily injury liability auto insurance will also pay for "pain and suffering" damages when a third party successfully sues. People with a home and other assets should buy coverage of at least $100,000 per person and $300,000 per accident. The biggest mistake is being underinsured on bodily injury liability coverage and over-insured on collision and comprehensive coverage.

PROPERTY-DAMAGE LIABILITY COVERAGE

This coverage pays for the repair and replacement of vehicles and other property damaged in an accident when you or another authorized driver causes an accident. The recommendation is at least $100,000 of property-damage liability per car.

PERSONAL INJURY PROTECTION

Personal injury coverage pays medical expenses and some percentage of lost wages to you or anyone authorized to drive your car, no matter who caused the accident.

MEDICAL PAYMENTS COVERAGE

Whether you need optional medical coverage and how much you need depend on what your health insurance coverage includes. Some experts recommend that people with excellent health insurance benefits and low co-payments purchase just the state minimum. It's important to remember that medical payments coverage also pays the medical expenses for passengers in the car who may not be so well insured, and which your regular health insurance won't cover. Usually optional, this coverage pays for medical expenses over and above amounts covered by personal insurance protection, no matter who caused the accident.

UMBRELLA POLICY

The Umbrella policy pays for losses above and beyond those covered by either auto insurance or homeowner's insurance; this is sometimes a cost-effective way to purchase liability insurance. It's recommended that people with assets over $300,000 purchase a $1 million liability umbrella policy in addition to other auto insurance (which could cost an extra $150-$300 per year.)

COLLISION COVERAGE

Collision coverage pays for damage to your car, less any deductible, no matter who is at fault. If your car is financed, your lender may require you to buy this coverage and may even require a specific deductible.

COMPREHENSIVE COVERAGE

Comprehensive coverage pays for damage to or loss of your car in the event of fire, theft, or vandalism. Again, your lender may require this coverage if your car is financed. You should take the highest deductible you can afford on collision and comprehensive, especially if you have a newer car. If you have an older, modestly priced, or inexpensive car, you may want to consider dropping collision and comprehensive coverage altogether. However, you should only drop collision if you can afford to repair or replace the car in the event of an accident.

PROTECTION FROM UNINSURED OR UNDERINSURED MOTORIST COVERAGE

Critical to protect you, your passengers, and anyone authorized to drive your car against bodily injury caused by an uninsured, underinsured, or hit-and-run driver, buy protection coverage of least $100,000 per person and $300,000 per accident.

RENTAL REIMBURSEMENT

To be reimbursed up to a specified amount per day for car rental or transportation costs while your car is being repaired following an accident, opt for rental reimbursement coverage.

TOWING AND LABOR

This will cover you up to a specified amount for towing and labor charges when your car breaks down, whether or not there is an accident involved.

AUTO REPLACEMENT

When you want payment for the full replacement value of the car, not its depreciated value, opt for Auto Replacement coverage.