01 Dec What Type of Car Insurance Is Available for Veterans?
At the very least, a basic auto insurance policy includes the minimum state coverage requirements, like liability insurance and personal injury protection. However, the insurance needs of a veteran or active military member might differ from those of a civilian.
You might be required to store your vehicle on a military base or in a garage for long periods of being deployed overseas. Regardless of the reason, military members have special needs, and companies offer various cover options to cater to those needs.
Besides your military status, your needs might also depend upon the type of car you’re purchasing. If you have a thing for vintage or classic cars, you might want to get extra coverage because a standard policy won’t cover that. A new car will need more coverage than a 15-year-old one. Choosing a luxury car or upgrading your vehicle will also require you to purchase extra coverage.
Here are a few coverage options you might want to consider, based on your needs.
Property Damage and Liability Coverage
Property Damage and Liability Coverage is an essential requirement mandated in almost all states. The coverage offers financial protection against liability caused to others’ property like vehicles, houses, or personal property.
In more technical terms, property damage and liability coverage is an option that covers financial liability caused to someone else’s property. This coverage helps the person responsible for the accident assume responsibility for the damage caused to someone else.
Typically, this coverage comes in two types. One offers the maximum amount for bodily injury per person—the second pay the maximum amount for bodily injury per accident. The coverage also provides the maximum amount for property damage in some cases. Make sure to check with your insurance provider to understand what’s covered and what’s not.
Typically, here’s what property damage and liability insurance covers.
- Damage caused to someone else’s vehicle, including new parts and body shop labor. ● Damage to other’s businesses, lawns, fences, mailboxes, etc.
- The legal costs incurred for the claim.
- Lost income for business after going through the accident.
- Other expenses.
The typical cost for this coverage ranges between $5,000 to $100,000, depending upon the coverage amount you choose. Higher coverage means higher premiums but more protection.
Medical Payments and Personal Injury Protection (Pip)
Generally, medical payments and Personal Injury Protection (PIP) look the same, but they differ slightly. Medical payments cover the medical expenses incurred by you or your passengers in an accident.
On the other hand, PIP covers hospitalization, medical supplies, lost fees, rehabilitation, and childcare. It is mandatory in 16 states. The expenses vary from state to state, but here’s an essential representation of what’s covered and what’s not.
- Hospitalization fee
- Lost wages
- Funeral or accidental death expenses
- Ongoing professional care
- Homecare expenses if you’re not able to fulfill these duties yourself.
In some states like New York and Michigan, PIP might also work simultaneously with health insurance. In this case, health insurance would cover the medical cost, and PIP would cover any lost wages.
The cost of PIP depends upon the state you live in and other coverage options you choose.
Collision and Comprehensive Coverage
Even though collision and comprehensive coverage are not mandatory by law, four out of five owners choose to purchase this coverage.
Collision coverage protects the vehicle against financial liabilities caused by the car’s collision with an object, like a telephone pole, mailbox. It also covers the cost of damage caused due to flipping over and potholes. The average annual cost of collision coverage is $290.
Comprehensive coverage offers financial protection against the damage caused due to disasters or a cause other than collision. It costs $134 per year. Comprehensive coverage provides coverage against the following:
- Contact with animals
- Natural disasters
- Broken windshield
- Fallen objects like branches or hailstorm
To decrease the insurance premiums, you can increase your deductibles. While this coverage is not mandatory in all states, you might be required to purchase it if the vehicle is on lease or finance.
Here’s another thing you might want to think about before moving on – the difference between Actual Cash Value (ACV) and Replacement Value. ACV is the car’s actual value if the accident did not happen, while replacement value is the amount you get after you file the claim after getting into an accident. Because these costs can be divergent, it is suggested you understand the policies followed by the company to determine the ACV and replacement value of the vehicle.
Uninsured and Underinsured Motorist Insurance
According to the Insurance Research Council, every one in eight drivers is underinsured or uninsured. This means that about 12% of people hit the road every day without auto insurance. If you happen to be in an accident with one of them, you could be on the hook for all the liabilities incurred by you for an accident that wasn’t even your fault.
Uninsured and underinsured motorist coverage might be able to help you cover up the expenses if you meet with an accident with an underinsured or uninsured driver.
Uninsured coverage protects you against drivers with no auto insurance. An insured person is someone who has dropped insurance or has been dropped by their insurer due to their driving record. Underinsured coverage offers protection against drivers with limited coverage options.
This coverage option is mandatory in some states and is usually 5% of the annual auto insurance premium.
Classic Car Insurance
If you own a classic, vintage, or collectible car, basic auto insurance might not be able to provide enough coverage for the vehicle. In this case, you might consider classic car insurance, which offers medical payments coverage, PIP coverage, uninsured and underinsured motorist coverage, and liability coverage for the vehicle.
You can also purchase roadside assistance reimbursement under this coverage option. This coverage varies in price based on the level of coverage you choose, how you use the vehicle, and where you store it. If you use the car frequently, you would have to pay higher premiums. Collector’s truck is also available under this option.
Classic car insurance provides protection against collision, damage from an object, and theft.
Rather than providing coverage for the vehicle, gap insurance kicks in when the compensation received in case of a total loss is less than what the insured owns to the financing company. This situation can occur when you financed a car with little down payment, traded in an upside-down car, took a car loan for more than 60 months, or frequently used the vehicle.
The situation can also arise if you purchase a car with a lousy resale value.
What Type of Car Insurance Is Right for You?
Factually speaking, there’s no “one-size-fits-all” when it comes to auto insurance. The right car insurance depends on your coverage and your needs and frequency of using the vehicle.
Here’s how you can choose the best car insurance.
- You can customize the coverage options according to your needs.
- As a veteran or active military member, you can ask your insurance provider for military discounts. You can also ask for non-military discounts.
- You can compare the quotes you receive from different companies and decide what’s best for you.
- You can get in touch with an independent agent.