There are six main components that make up the cost of your insurance policy. Bodily injury liability, property damage liability, medical payments, uninsured motorist protection, collision coverage and comprehensive. The minimum coverage needed in Maryland is bodily injury, property damage liability, personal injury protection, and uninsured motorist. Here’s what each of the components cover:
Bodily injury liability: This covers injury and death claims made against you. It also covers the legal costs in your car injures or kills someone.
Property damage liability: If you are in an accident and your car damages property. It is required in all but three states.
Medical payments: This will pay for injuries to yourself and the occupants of your car. This is optional in some states; Maryland is not one of those.
Uninsured motorist protection: Unfortunately, in some states as many as 30% of drivers are uninsured. This component will cover injury caused to you or the occupants of your car against uninsured or hit-and-run drivers. Under-insured coverage is also available to make claims against someone who inadequately insured.
Collision coverage: This may be required by your lender. This will cover the damage to your car up to its book value. Collision coverage carries a deductible, which is the amount per claim you have to pay before the insurance takes effect. The lower the deductible, the higher the premium.
Comprehensive: This coverage carries a deductible. Damage to your car form theft, vandalism, fire, wind, flood, and other non-accident causes.
By having an understanding of why you pay for auto insurance you will make the right decision for your coverage and be protected in the event of an unfortunate accident.
Freedom Insurance Agency
(410) 795-2005
