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Understanding The Basic Car Insurance Types for Claims

by Steven Brown
car accident lawyer in Alaska

Many people purchase auto insurance covers but don’t take the time to understand the fine print. It’s important to review your auto insurance policy to protect your rights.

An insurance agent may have mentioned what you’re entitled to after an accident, but it’s prudent to confirm their assertions. A car accident lawyer in Alaska can help you understand basic types of auto insurance besides helping you seek justice after a car crash.

Common Auto Insurance Policies

All auto insurance companies offer similar basic auto insurance coverages. All states impose minimum requirements when it comes to auto insurance. However, the requirements can vary by state. 

Motorists can purchase additional coverage when buying basic insurance coverage. While buying additional coverage is optional—it can be a wise decision. Common auto insurance coverages can include:

Liability Insurance 

Liability insurance is basic coverage for all cars. This insurance plan covers pedestrians, other motorists, and property. In other words, liability insurance pays for victims’ damages, including medical bills, property damage, lost wages, and pain and suffering, among others.

The mandatory minimum liability coverage amounts vary by state. In Alaska, the minimum coverage amounts are:

  • $50,000 for bodily injuries or fatalities to one person, or
  • $100,000 for total injuries or death per accident, and
  • $25,000 for property damage.

Claimants must show proof of liability insurance coverage if bodily injury or property damage exceeds $500.00. Completing a Certificate of Insurance form provided by the investigating officers is sufficient evidence of liability insurance coverage. These forms are also available from the Division of Motor Vehicles or can be filled out online.

Failing to provide proof of liability insurance coverage can attract the following consequences from the Division of Motor Vehicles:

  • Driver’s license suspension;
  • Suspension of driving privilege, or 
  • Suspension of the privilege to obtain a driver’s license.

Suspension duration can vary by violation—it could be 90 days to years. Your driver’s license can be suspended even if you’re not responsible for the collision. 

Collision Insurance 

Collision insurance is optional, but it may be required when purchasing a car on loan or lease. This insurance covers damages caused by external objects like poles and other cars. Over 70% of motorists purchase collision insurance in addition to basic insurance coverage, as per the Insurance Information Institute.

Collision insurance is part of comprehensive coverage. Simply put, expect to buy collision insurance when you buy comprehensive insurance coverage. Comprehensive coverage is not mandatory unless it’s required when purchasing a car on loan or lease. The covered risks include theft, fire, hail, vandalism, and miscellaneous hazards like crashes involving wild animals. 

Personal Injury Protection 

Personal injury protection (PIP) is provided in no-fault states. Alaska is an “at-fault” state, meaning the at-fault is responsible for the other drivers resulting from their negligence. 

PIP covers medical expenses, regardless of fault. However, you can still be sued in a no-fault state, especially if the accident involves serious injuries or fatalities. Complete or “true no-fault” accidents are rare. In other words, accidents, where only one party is liable are rare.

At-fault vs. No-fault Insurance Laws 

All states adopt either at-fault or no-fault insurance laws. 12 states currently follow no-fault insurance laws while the rest and Washington, D.C. are at-fault states. 

Both parties file claims with their insurers for their loss. However, the at-fault driver’s insurance company pays for the property damages of both parties. In at-fault states, all claims are filed with the at-fault driver’s auto insurer.

Accidents in At-fault States 

At-fault states are also called tort states. The at-fault driver should compensate the plaintiff (s) for losses. This can be done through their insurance companies or pay from out-of-pocket. The bodily injury and property damages liability portions of your auto insurance policy should pay for the other driver’s car damages and medical bills, respectively. 

The coverage is limited by your auto policy limits. Any overage is paid from the policyholder’s pocket. A PIP or medical payments coverage can help pay for your injuries and those of your passengers, up to the policy limit.

Car Insurance and Negligence 

Liability is not always clear in many car accidents, depending on the facts of an accident. Some accidents are complex, and thus fault isn’t always obvious. 

When both drivers are partially at-fault, auto insurers typically look at the degree of negligence of each driver. Negligence falls into three categories — pure contributory, pure comparative, and modified comparative. 

Alaska is a pure comparative negligence state, meaning you can sue for damages even if you are partially liable for the accident. This system is based on fault percentages. Your fault percentage is deducted from the recoverable damages and you receive the difference or the net amount.

Understanding the basic insurance coverage types is the first step to finding an ideal auto insurance coverage. A car accident attorney can help you understand more on this subject.

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