Insurance World

Car insurance is basically insurance that drivers can purchase for any kind of vehicle in order to protect against losses sustained in traffic accidents. Auto insurance policies are, in reality, a bundle of different coverages. This insurance will usually cover the insured party, the insured motor vehicle, and any third parties involved. Different policies will identify the situations in which each of these entities is covered.

Below are the specific coverages involved when you purchase car insurance.

- Liability Insurance: Liability coverage is the most basic and foundational coverage in car insurance policies and is required in most states. This coverage ensures that if you are the one at fault in an accident, your liability insurance will pay for the physical injury and property damage expenses of any third parties involved. This coverage includes legal bills. Remember that third parties can sue you for “pain and suffering” damages. Minimum insurance may not sufficiently cover you in more extreme cases, which is why many people recommend that drivers purchase more than the state minimum required. Liability coverage limits are usually conveyed with three numbers. For example, liability limits of 20/50/10 indicate that there is coverage of $20,000 in bodily injury coverage per person, $50,000 in bodily injury coverage per accident, and $10,000 in property damage coverage per accident.

- Collision Coverage: In the case that you are in an accident, collision insurance will pay for the repairs that your vehicle requires. Collision coverage is usually the most expensive coverage that you will have to pay for. Insurance companies will declare a vehicle “totaled” or a “write-off” if the replacement would be cheaper than the repairs needed.

- Comprehensive Coverage: This coverage will pay for any damages to an automobile that were not caused by an accident. Qualifying damages include damages arising from carjackings, vandalism, natural disasters, and hitting an animal.

- MedPay, PIP, and No-Fault Coverages: MedPay will pay for the medical expenses of you and anyone else in your car after an accident, regardless of whose fault the accident was. PIP (Personal Injury Protection) and “no-fault” coverages are other forms of medical payment protection. They are broader than MedPay and may be required in certain states. These expanded coverages cover child care and lost wages.

- Uninsured and Underinsured Motorists Coverages: UM (Uninsured Motorists) coverage will pay for injuries you have sustained if you are involved in a hit-and-run by a driver who does not have auto insurance, and is mandatory in many states. UIM (Underinsured Motorists) coverage will pay for you if the driver who hit you creates more damage than their liability insurance can cover.

- Supplemental Coverages: Rental reimbursement is an add-on that will cover rented vehicles in case of damage or theft. Auto replacement coverage ensures that your automobile will be fully repaired for replaced even if the costs are more than its depreciated value. Coverage for towing and labor covers you in case of an auto failure on the road where towing is necessary. These supplemental coverages are usually offered as separate items or included in larger policies.

Buy-to-let property insurance, some times also known as residential property owners insurance, is needed if you own houses and/or flats to tenants – either on a short-term or long-term basis. Ordinarily you can buy cheap buy-to-let property insurance in the event that you rent five or less properties in the UK than is the case if you rent more than five properties, as in the case of the former you are seen as a small time landlord with a small business, whereas in the latter you are seen as a full blown property-owning company.

Whether you plan to rent five or less properties, or five or more properties, is, however, a side issue, as in both cases you’ll need to ensure that you have at least the minimum level of required insurance in order to protect yourself. Consequently, the number of properties you own will have a bearing only insofar as the insurance premiums are concerned. That said, if you are looking to become a property owner with a letting business, then you need to ensure that you have the following minimum provisions in your insurance policy:

Fire

Insuring against any fire on the property

Natural Disaster (also known as tempest insurance)

Insuring against natural disasters that may occur, such as a storm where the winds tear off your roof or guttering

Theft

Which is especially important if you are renting out fully furnished properties. In the event that you are renting out unfurnished premises, you may wish to have a discussion with your tenants about whether or not they should have home contents insurance

Public Liability Insurance

This should be a must as it will protect you against any claims your tenants or any third parties (such as their guests) may have for injuries they suffer while on your property

Lost Earnings

There may well be times when your property remains empty; say, for example, while you look for new tenants. If you are relying on the rental income from your tenants to repay the money you borrowed to purchase the property, you need to ensure you have lost earnings insurance to compensate you during this period

Employee Liability Insurance

If you have employees who will visit the property for you to repair any damage, etc. or to collect the rental payments, then you need to make sure that you have employee liability insurance in case they get injured while carrying out their assigned task

Legal Expenses Insurance

As a property owner you may find the need from time to time to retain the services of a lawyer; for example, if your tenants refuse to pay their rent or move out of the property at a specified agreed time – when you may need to get an eviction notice. As legal expenses in the UK can be expensive, you should consider insuring against this risk by having in place a provision of legal expenses in your insurance policy.

Although the above are basically the bare minimums you need in your buy-to-let property insurance policy, you can also tailor these types of insurance policies to meet your particular needs, so make sure that you talk through your circumstances with your insurance provider, especially if you anticipate expanding the business in the near future.