Options Under the Basic Policy

If a policyholder injures someone in an automobile accident for which they are responsible, this coverage protects them against claims and lawsuits for injuries or death caused by their automobile. This coverage also pays their legal defense and settlement costs.

This coverage is optional under a basic policy. If this coverage is chosen, coverage is limited to $10,000 for all persons injured in an accident.

Under a basic policy insurance companies may or may not offer collision coverage.

Collision coverage pays to repair a policyholder's car after an accident, no matter who is at fault. Policyholders may choose not to buy collision coverage. The default deductible on most policies is $500.00. Raising or lowering the deductible will generally increase or decrease their collision coverage premium. A lease agreement or financing plan may require the purchase of collision coverage.

Under a basic policy insurance companies may or may not offer comprehensive coverage.

Comprehensive coverage reimburses a policyholder if their car is stolen or damaged by vandalism, fire, flood, animals, or flying rocks or debris. The default deductible on most policies is $500.00. Raising or lowering the deductible will generally increase or decrease their comprehensive coverage premium. A lease agreement or financing plan may require the purchase of collision coverage.

The coverage choices made by a policyholder apply to all persons covered under the policy. However, a policyholder can choose to exclude certain drivers on their policy from being covered by collision and/or comprehensive coverage on a specific automobile that they do not drive. This means that if the excluded driver operates the automobile and is involved in a loss, the policy will not cover any damages to the insured vehicle.

See Also:
Coverages Required By Law