Guide To Buying Car Insurance in Maryland

 

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Five Types of

Auto Insurance & What They Mean

1.   Liability Insurance




Examples of coverage

• Liability is the kind of insurance that protects you from financial exposure when you’re at fault for an accident. In other words, it handles others’ damages when you’re at-fault.
• $30k/$60k/$15k is the minimum coverage you can have in Maryland.
• What do these 3 numbers mean?
• The 1st # means “maximum per person”
• The 2nd # means “maximum total”
• The 3rd # means “maximum property damage
• Example: You were in an accident detemined to be your fault. You had coverages of $30k/$60k/$15k. It was a 3 car accident (but you are responsible for all the vehicles). There was a driver and 1 passenger in each of the other vehicle, all of which were very badly injured.
• The coverage would translate:
• Each injured party in the other vehicle would cap out at receiving $30,000 from your coverage. No one party could receive more than $30k for his/her injuries (i.e. 30k max per person). But, not each party would receive that much, even if his/her injuries warranted such. The maximum coverage available for all 4 injured people would be $60,000 (i.e. 60k max total). That means the 4 parties would have to divide up that coverage, even if their injuries were catastrophic. Although both of the other vehicles were considered to be total losses, your insurance would only pay $15,000 (i.e. 15k max for property damage for BOTH- $7,500 each or a percentage thereof).
• Keep in mind that the insurance maximum is not the maximum for which an injured party may be awarded a verdict.
• When you owe someone compensation greater than your insurance coverage, they can come after your assets (i.e. belongings: houses, cars, businesses). Therefore, the first number in your liability coverage should be larger than the sum of your assets. If there is no such option - look into buying an “umbrella policy” for additional coverage.

2. UM/UIM:

• You must have at least as much UM/UIM as your liability coverage in MD. (Unless you’re a taxi)
• UM (Uninsured Motorist) is insurance to protect you in case you’re in an accident with an uninsured vehicle or the other vehicle drives off. When the at-fault vehicle has no insurance, your insurance company steps in to “act as if” they’re the at-fault
• Insurance.
• $250 is the standard deductible for UM
• If you’re in an accident with someone who has $30k/$60k and you have very serious injuries, it
• would not be fair to only be covered for $30k (if you had more). Most people with minimum coverage don’t have assets to take, and it would be an uphill battle if they did. Uninsured motorist coverage makes sure you’re able to at least as much coverage as your liability coverage. If you have $100/300, your insurance would cover the difference between their insurance and yours. (between $30k and $100k = 70k) Their insurance would pay $30k (their max) and yours would pay $70k on top.

3. Collision/Comprehensive:

• Collision: This insurance covers your car damage when you’re involved in an accident that is your fault.
• You get to pick the deductible you will owe every time you use the coverage.
• Protects your vehicle in the event of damage caused by:
  
  - Natural Disasters
  - Falling Objects
  - Fire
  - Hitting/Being Hit by an Animal
  -Vandalism
  - Theft 
• Collision will also step in and help you if you’re in an at-fault accident that has a long
  investigation. They will fix your car immediately and get their money back from the at-fault
  insurance company.
• Rental coverage does not automatically come with collision. So, make sure you have it.

4.  Gap Insurance: 

• Cars depreciate every day. If you have a loan, you could owe more than the car is worth almost immediately.
• Total Losses never seem fair.
• The insurance company pays you what your car is worth on the open market, which often differs from what its worth to you. Don’t end up owing on a vehicle that you don’t have anymore.
• Gap insurance will pay off your loan if your total loss settlement is less than your loan.
  You may already have gap coverage with your bank. check before you buy it.

5.  PIP/MedPay

• PIP (Personal Injury Protection Coverage) is available to you no matter whose fault the accident was. It insures you for Medical expenses or 85% of lost income up to the amount you specify on your policy. 
• The standard amount of PIP is $2500 per occupant.
• It is illegal in md to raise your rates for using pip
  If the accident is the other driver’s fault & you use you PIP/MedPay to pay medicals and lost wages, the at-fault insurance has to pay them too. You can keep the double payment towards your pain and suffering.
  Medpay is like PIP, but it does not pay lost income.
  “Guest” PIP only covers household relatives, not you.
  PIP will not cover you unless you buy "full” PIP.
• PIP requires you to submit a pip application within one year of the accident.
• If you have been injured in an accident, you should consult an attorney.

*The information within is not legal advice. Insurance is always changing, so you should do more research before purchasing insurance. For more information, consult a Licensed Insurance Agent or a Maryland Attorney.

As always, call us anytime for your free, no-obligation estimate.

Bryan's Body & Fender

3106 Rocks Road, Jarrettsville, MD 21084

410-838-7320

Conveniently serving Harford County, MD, including: Bel Air, MD, Jarrettsville, MD, Forest Hill, MD, Aberdeen, MD, Havre de Grace, MD, Abingdon, MD, Edgewood, MD, Joppa, MD, Fallston, MD and Churchville, MD.