Auto Insurance Basics: The coverage you need

You know you need it, but few understand it.  Many have it, but few know whether it is adequate.  Auto insurance is one of those many things that we pay for and don’t truly understand the value of until it is needed.  This page is an attempt to give you the basic nuts and bolts understanding of what you will be purchasing before heading to the DMV to register that sexy new ride.

What is required?

For all my KC Metro residents here is the breakdown for what is required in Kansas and Missouri.  Both State of Missouri and Kansas requires that you carry the following types of insurance:

  1. Liability Insurance: This type of coverage is used when you caused the injury and/or property damage.  Missouri requires that you carry at least a 25/50/10 policy.  These numbers mean $25,000 Bodily Injury (BI) per person, $50,000 for BI per Accident and $10,000 for property damage (PD) per accident.
  1. Uninsured Motorist: 25/50 policy ($25,000 BI/ $50,000 per accident). This type of coverage is used when the other driver is at fault but does not have insurance. All motorists are required to have insurance but as both you and I know, there are many out there who do not have coverage.  Missouri estimates there are around 14% of drivers on the road who do not have coverage.

Kansas also requires not only “uninsured insurance” but also “underinsured insurance”.  The difference being the underinsured person would have coverage but not enough to take care of their financial obligations, so your coverage would take over from there.

Personal Injury Protection

Kansas is considered a no-fault state.

This does not mean that fault is not considered after an accident. However, regardless of fault, your injuries after an accident will be covered by personal injury protection coverage before any other type of insurance coverage.

Your car insurance policy must include PIP at the following minimums per accident:

  • $4,500 per person for medical costs.
  • $900 per month for 1 year for disability and loss of income.
  • $25 per day for in-home services.
  • $2,000 for funeral, cremation or burial expenses.
  • $4,500 for rehabilitation.
  • Collision – This coverage will help you with damages to your car resulting from a traffic accident.
  • Comprehensive – This will help with damages to your car that may result from other events not involving a traffic collision.
  • Towing and labor.
  • Rental reimbursement.

NOTE: Collision and comprehensive coverages are often required as part of a car loan or lease agreement.

It should be pointed out that these minimum coverages are usually not recommended by any reputable insurance agent and not because their commission would be higher if they sold you a better policy.  Most agents truly have your best interests at heart (I believe anyway).  Selling you a state minimum without strongly recommending otherwise would seriously put the agent in an ethical quandary because it simply does not adequately protect the insured well enough when coverage is needed.

Take for instance the BI per person limit of $25,000.  Can you imagine the whopping bill an individual would get if there was a serious injury?  Certainly more than 25k!  The amount over your coverage would come out of your pocket and the attorney representing the other party will be sure to stick it to you for all they can.

Also, remember the minimum $10,000 for property damage?  The average new car price is $30,000 and the average used vehicle cost is $12,000.  Just presenting the facts, I’ll let you do the math.  Do you want to be liable for taking care of someone’s totaled vehicle?  Attorneys can be the good guys or the bad guys depending on which side of the table you are sitting on.  Either way, it’s best to be covered because your financial independence could depend on it!

Click Here for information on Classic Auto insurance.

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