Understanding auto insurance can be confusing. At Pete Beckman Insurance, we want you to know your options when choosing an auto insurance policy. At it’s most basic, auto insurance protects you against financial loss in an accident and serves as a contract between you and the insurance company. You agree to pay the premium, and the insurance company agrees to pay your losses as defined in your policy.
Auto insurance provides three basic coverages:
- Property damage coverage which pays for damages to or theft of your car
- Liability coverage which pays for legal responsibility to others for bodily injury or property damage
- Medical coverage which pays for the cost of treating injuries, rehabilitation, and, in some cases, lost wages and funeral expenses.
Liability Insurance Coverage
Bodily Injury Liability: Applies to injuries you, the designated driver, or policyholder cause to someone else. You and family members listed on the policy are also covered when driving someone else’s car with their permission.
Property Damage Liability: Pays for damage the driver may cause to someone else’s property. Besides car damage, this could include damage to lamp posts, telephone poles, fences, buildings, or other structures.
Physical Damage Coverage
Collision: Pays for damage to your car resulting from a collision with another car or object.
Comprehensive: Reimburses you for loss due to theft or damage caused by something other than a collision with another car or object, such as fire, falling objects, explosion, natural disasters, vandalism, riot, or contact with animals.
Other Coverage Options
Medical Payments or Personal Injury Protection (PIP): Pays for treatment of injuries to the driver and passengers of the policyholder’s car. PIP can cover medical payments, lost wages, and the cost of replacing services normally performed by someone injured in an accident; it may also cover funeral costs.
Uninsured and Underinsured Motorist Coverage: Reimburses you, a family member, or a designated driver if an uninsured or hit-and-run driver hits one of you.
Auto Insurance Requirement in Iowa
Iowa’s Motor Vehicle Financial Responsibility law requires all motorists to have at least a liability auto insurance policy. This policy ensures motorists can cover bodily or property damage done to others while driving. Although liability policies cover auto insurance basics, not every situation may be covered.
The Difference Between Cancellation and Non-renewal of a Policy
Policies can cancel for the following reasons:
- If you fail to pay the premium
- You have committed fraud or made serious misrepresentations on your application
- Your driver’s license has been revoked or suspended
Non-renewal is an entirely different matter than cancellation. Either you or your insurance company can decide not to renew the policy when it expires. Iowa requires your insurance company to give you at least 10 days notice and explain the reason for non-renewal before it drops your policy. If you think the reason is unfair or want a further explanation, call the insurance company’s consumer affairs division. Call the Iowa Insurance Division if you don’t get an explanation.
If you need further understanding of auto insurance, or assistance choosing the right policy, our team at Pete Beckman Insurance is ready to help. Let us do the work and give you peace of mind on the road!