Auto insurance protects vehicle owners by covering and financing losses caused by risks. It is the most used personal insurance. The finances received when you have auto insurance are known as auto insurance settlements.
Are you working towards buying a new car? Are you shopping for auto insurance coverage? “Yes,” You’ll first need to understand the different kinds of auto insurance coverage policies available.
These vehicle insurance policies will serve to protect you, your vehicle, and your passengers in case of an accident. There are six common auto insurance coverage options such as collision coverage, comprehensive coverage, personal injury protection, and auto liability coverage among others.
Depending on your state some covers are optional while others are compulsory. You should therefore know the policies that apply in your state and learn about each cover for easier selection.
Sections Of Auto Insurance Coverage
Auto insurance coverage has different sections. It includes details on the type of coverage, exclusions, and rights and obligations under the different policies. Here’s what to know about the declaration page and insuring agreement:
Declaration Page
Auto insurance is a legal contract between you and the insurer. A declaration page on insurance helps in identifying the policy number, and it contains information like coverage limits your information and the policy term. It also contains the vehicle details of the insured.
Insuring Agreement
Under the insuring agreement, there is a statement that lists the risks and perils covered under auto insurance. It also helps to highlight exclusions ( events that the policy doesn’t cover)
Lastly, it contains definitions that help understand the cover thus preventing misunderstandings.
Auto Insurance Settlements
Auto insurance settlement is the amount of money a policyholder receives from an insurer to cater for a covered loss.
As you’ll be filing your auto insurance claim after an accident or damages, questions like ” is my settlement taxable?” or ” does settlement money get taxed?” Will arise.
Your attorney will help in answering such questions. To answer the above questions your insurance settlements are taxable. Elements of a settlement that are taxable include lost wages, and emotional distress damages among others.
However, personal injury settlements for physical sickness or damages are usually not taxed. All the components of auto insurance coverage are there to help you in protecting yourself and your vehicle.
If you need help in understanding any part of auto insurance coverage or auto insurance settlements don’t hesitate to call us.
Here Are Common Auto Insurance Coverage Options For You:
Auto Liability Coverage
Liability coverage is compulsory in almost all states. As a driver, your state will require you to have a minimum amount of auto liability coverage. Auto liability coverage is divided into property damage liability or bodily injury liability.
Property damage liability helps to pay for the harm caused to other people’s property while driving. While bodily injury liability caters to another person’s injury after an accident.
Comprehensive Coverage
This insurance policy caters to auto damages caused by fire, vandalism, theft, or hail. In case your vehicle is damaged after a fire, this coverage through receiving auto insurance settlements will be used to either repair or replace the vehicle.
This coverage has a deductible. A deductible is the amount of money paid from your pocket to cater for a vehicle’s damages before your insurer reimburses a claim. This coverage is usually optional.
Uninsured and Underinsured Coverage
This vehicle or motorist coverage helps in catering for accidents caused by a driver that isn’t insured. This cover will be used to pay for your medical bill or vehicle repairs. For underinsured coverage, the driver has only insured their vehicle.
Meaning after an accident their liability limit can’t cater for your injuries. Therefore underinsured coverage will work for you. This cover is mandatory in some states and optional in others.
Collision Coverage
Collision coverage helps to repair or replace a vehicle after hitting an object (fence) or another vehicle. This coverage is usually optional however vehicle lenders or leaseholders will require you to have it.
Personal Injury Protection
PIP or personal injury protection is limited to some states. This coverage helps in paying off medical expenses when you get involved in an accident. Payments received from your injury protection are known as personal injury settlements.
These settlements can also be used to cover arising expenses due to the injuries such as lost income. It is mandatory in some states and optional in others. According to the tax code, a personal injury settlement is tax-free.
It’s however only tax-free when the funds are used to cater to physical sickness or injuries. In the case of emotional distress compensation, your settlements will be taxed.
Medical Payment Coverage
This coverage caters to anyone that’s injured after your insured car is involved in an accident. The auto insurance settlements received can cater for surgery, x-rays, hospital visits, and more. Medical payment coverage is optional in some states and it’s required in others.
Other Types Of Auto Insurance
Aside from having your car insured under the common types of insurance you can co consider covering your vehicle using extra policies. If you don’t understand how these extra policies work you can seek advice from an expert insurance agent.
Visit Georgia State Auto Insurance for reliable insurance consultants. Here are some optional coverages that you can purchase for your vehicle. They include:
- sound system coverage,
- classic car insurance,
- gap coverage,
- ridesharing coverage,
- rental reimbursement coverage,
- new vehicle replacement coverage,
- and labor and towing cost coverage.
About Georgia State Auto Insurance
We are the most reliable insurance consultants in Georgia. Don’t hesitate to call. We will gladly assist you with auto insurance coverage better. Our experts will help you with your auto insurance settlements and personal injury settlements.
Our experienced staff will help in identifying whether the settlement you receive will need to be taxed. Call us today for an auto insurance quotation!
