Hi! I'm Dan Lyles from Lyles Insurance and in this video we're going to cover the basics of an auto insurance policy there are five components to an auto insurance policy and they are liability coverage uninsured and underinsured motorist coverage medical coverage comprehensive coverage and collision coverage and we're going to go over each one the first component of your auto insurance policy is liability coverage and that is required in every state it covers you when you are at fault in an accident that causes injuries or property damage to others so in other words it pays the other guy for damages you caused whether it be injury or property damage and when you see it on a policy it's going to be represented in numbers for example 100 300 100 but to explain that I'm going to break it down in parts a B and C to help you understand it so to understand the breakdown of liability coverage let's use an example where you're at fault an accident with multiple people injured and there's a little bit of property damage as well Part A is the amount in thousands that it will pay any one person for their injuries Part B is the amount in thousands that will pay maximum in total for everyone's injuries and Part C is the amount in thousands that will pay for property damage you caused so as an example let's take a common level of coverage that most people have which is one hundred three hundred one hundred part a is the amount that it would pay for any one person's injuries that would be one hundred thousand dollars maximum Part B would pay total injuries to multiple people that would be up to a three hundred thousand dollar maximum Part C would pay up to $100,000 maximum for any property damage you caused now this is a lot less common than what I just showed you but some people have what's called combined single limits liability coverage which is basically the same thing only it doesn't separate the liability coverage into three different parts a b and c it just gives you one grand total for all of it you don't see this very often but you will see it especially with policies that have high levels of liability coverage the second major component is uninsured and underinsured motorist coverage what that does is covers you in an accident if someone is at fault and hits you and doesn't have liability coverage or has liability coverage but doesn't carry enough to cover for all the damages they cause this happens a lot in severe accidents it's very important not to overlook this because one in every six drivers are driving around without any auto insurance coverage and other ones that do have coverage many of them have very low levels of liability coverage and one last thing to keep in mind is that you can only select this level of coverage as high as you selected your levels of liability coverage so if you went skimpy on your liability coverage and only go with state minimum levels that's as high as you're going to be able to take on yourself with uninsured or underinsured motorist coverage the third major part is medical coverage now different states call it different terms some states call it medical payments coverage some states call it personal injury protection and some states call it medical benefits coverage they all mean about the same thing and there's very little difference between them but what they do is they cover you and your passengers for injuries caused by an accident regardless of who is at fault parts four and five comprehensive and collision coverage kind of go together because they are the two coverages that pay for damages done to your vehicle and having both is what many people refer to as having full coverage I'm not a big fan of that term because I believe full coverage is misleading but that's what people mean when you hear someone say they have full coverage it means they have comprehensive and collision coverage on their vehicle these coverages are both optional however if you finance your vehicle your finance company is going to require you to carry both coverages until you've paid off your car loan now to explain comprehensive and collision coverage I like to start backwards because it's easier to explain collision coverage pays for damage to your vehicle due to an accident regardless of who was at fault comprehensive coverage pays for any damage besides an accident for example theft fire vandalism weather damage hitting a deer etc in some states it's known as other than collision coverage instead of comprehensive coverage and to be honest I like that term better also because I believe comprehensive coverage is another misleading term but anyways they both pay for damage up to the value of your vehicle – whatever deductible you carry before we finish it's important that you understand how deductibles work deductibles apply to both parts four and five comprehensive and collision coverage fitters your out-of-pocket expense resulting from damage to your vehicle so as an example let's say you were in an accident you have a fender bender that caused $2,000 worth of damage and you have a $500 deductible what your insurance company will pay would be $1,500 that'd be the $2,000 in damages – the $500 deductible the same applies if it was comprehensive coverage and you hit a deer and you had 500 deductibles and did 2,000 dollars worth of damage it would again pay $1,500 so deductibles and premiums have what what's called an inverse relationship meaning the lower deductible the higher the price and vice versa but that's the basics of an auto insurance policy and it's really important that you know these before you start selecting coverages so I hope you learned a lot from this thanks and have a great day