Shopping for auto insurance can be a little overwhelming. Understanding auto insurance coverage and how it applies to your specific needs will certainly make your shopping and selection process much easier. Because there are many different types of cars on the road, and varying coverage requirements and needs for the people who drive them, no two auto insurance policies are alike.
The question to be answered is, “which policy is right for me?” Understanding your coverage options will help you make well-informed decisions as an insurance consumer in Connecticut. Below we’ll explain the required, recommended and optional auto insurance coverages and outline car insurance limits and policy deductible choices.
Required Auto Insurance Coverages in CT
The State of Connecticut requires all registered vehicles to carry at least the minimum limits of auto liability insurance (property damage and bodily injury coverages), as well as uninsured and underinsured motorist coverage. Here are the specific minimums for CT:
- Bodily Injury Liability – Covers you against claims that others file against you for injuries they sustain from an auto accident that you cause. You are required to carry minimum limits of $25,000 per person and $50,000 per accident on your insurance policy.
- Property Damage Liability – Covers you against claims that others file against you for damage to their property as a result on an auto accident that you cause. You are required to carry a minimum limit of $25,000 per accident on your insurance policy.
- Uninsured/Underinsured Motorists Coverage (UM/UIM) – This insurance coverage protects you and your passengers when you are hit by a driver who is operating their vehicle without insurance, or with limits that do not fully cover the injuries you sustain in an accident that the other party caused. It also protects you when hit by an unknown driver (hit and run). Although many states do not require UM/UIM coverage, it is mandated by law in the State of Connecticut.
It is very important to keep in mind that the above limits are minimums and not usually the recommended level of coverage. You may still be financially liable for damages that surpass your limits, so while higher limits will cost you more, you will want to consider purchasing more than the minimums if your budget allows for it.
Recommended Coverage: More Than Just Liability and UM/UIM
In addition to the minimum liability and the UM/UIM insurance required in Connecticut, you should also consider carrying both comprehensive and collision coverages. Although these auto insurance coverages are not mandatory in all scenarios, they are highly recommended for your financial protection.
- Comprehensive Insurance – Comprehensive coverage (sometimes referred to as “comp”) is designed to cover damage to your car in a non-collision-related claim. Examples of incidents that apply to comprehensive coverage include but may not be limited to damage caused by falling objects (such as tree limbs and hail), flood, fire, vandalism, theft and animals.
- Collision Insurance – The property damage liability insurance you are required to carry pays for the property damages incurred by other parties if you are at fault for an accident. However, you need to carry collision insurance if you expect your insurance policy to pay for damages to your own vehicle.
Even though the state doesn’t require you to carry comp and collision coverages, it may be required by your lender or the leasing company if you still make loan payments or lease your vehicle. Financial institutions and auto dealers require comp and collision coverage to protect their assets. Unless you purchase your car outright, your lender has a security interest in your car until you make the last payment – they will look to the value of the car if you fail to make your payments. Likewise, if you are leasing your vehicle, the dealership still maintains ownership in the car.
Additional Auto Insurance Coverages
Now that you understand the required and recommended car insurance coverage as a CT driver, here are some additional optional coverages that you may want to consider carrying on your auto policy.
- Gap Insurance – If you own a car that has a current value that is less than the amount you still owe on it, then you may want to consider carrying gap insurance. This coverage will protect you financially in the event your car is totaled in an accident by paying the difference between the current value of the car and the outstanding loan balance. This will help you to avoid making car payments on a car that is no longer on the road.
- Rental Reimbursement – Many drivers have auto insurance to cover physical damage to their vehicle in case of an accident, but many do not anticipate how they will get around while their car is being repaired or replaced. Carrying rental reimbursement on your policy will either fully cover or at least help offset the cost of renting a vehicle.
- Roadside Assistance – Unless you already have a motor or travel club membership that includes towing and other roadside assistance benefits, you may want to consider carrying roadside assistance on your auto policy, especially if you’re driving an older vehicle that has an increased risk of breaking down. Having this coverage can bring you peace of mind knowing that a simple phone call can keep you from being stranded on the side of the road or paying for a very expensive towing service. Some carriers include a roadside benefit on all policies and some will offer it as an add-on endorsement.
- Personal Umbrella – Having a personal umbrella policy in place provides broad liability protection on top of your home and personal auto insurance. It protects you in the event you are liable for damages in excess of your auto or home insurance liability limits. Carrying a personal umbrella policy provides a supplementary layer of liability protection that is fairly affordable.
Note that some “optional” coverages such as rental reimbursement and roadside assistance may come standard with an auto policy, so it’s best to check with your auto insurance carrier to be sure you either have these coverages in place, or at least have the option to purchase them.
Deciding on Auto Insurance Limits
Connecticut’s requirement for all drivers to carry minimum liability coverage is no guarantee that you are adequately protected. It is very important that you understand that you could be paying out of pocket if compensation for injuries and damages you cause exceeds the minimum limits mandated by the state.
Carrying adequate limits to protect your assets and future earnings is critical. Generally, most auto insurance carriers will have “standard limits” for auto insurance coverages, yet there are typically options for higher limits to increase your protection.
Choosing Auto Insurance Deductibles
Most auto insurance policies will require a deductible for comprehensive and collision coverages and maybe other coverages. Your “deductible” is the amount of money deducted from your settlement when you file a claim. It is the dollar amount that is your share of the claim to pay. For example, if you have a deductible of $500 and your car is deemed a total loss, if the value of the car is determined to be $10,000, you would receive a check from your insurance carrier for $9,500, which is the value of your car less the $500 deductible (there may also be other adjustments for sales tax, betterment, etc.). Usually, you’ll have a choice between deductible amounts of $500 or $1,000. However, depending on the carrier, you may also be able to purchase other, lower or higher deductible options, or no deductible at all.
Like most insurance deductibles, auto insurance deductibles typically provide a “seesaw effect” with regard to the relationship between your deductible and the premium you pay for coverage. Normally, the higher your chosen deductible, the lower the premium, and the lower the deductible, the higher the price of your coverage. Choosing higher deductibles is one of the easiest ways to lower your premium. However, be careful to choose deductibles that you will be comfortable paying in the event that you file a claim. Your deductible applies whether or not you are at-fault for a loss (but if you are not at fault your insurer will attempt to recover your deductible from the at-fault party’s insurer).
Final Thoughts on Understanding Auto Insurance Coverage
Understanding your coverage should make your purchasing decisions a little easier. There are many coverage options with features and benefits that will suit your unique, personal needs. If you’re in the market for a new auto policy, or if you are looking to compare your current premium and coverages with a new carrier, consider Plymouth Rock Assurance. Plymouth Rock provides custom-built policies, knowledgeable representatives and exceptional customer service. You can also find more information on this website about discounts that may be good for you or more details about full insurance coverage. If you have questions about what car insurance coverage is right for you, call Plymouth Rock Assurance to speak with a representative and get a quote today!
Plymouth Rock Assurance® and Plymouth Rock® are brand names and service marks used by separate underwriting, managed insurance, and management companies that offer property and casualty insurance in multiple states. In Connecticut auto insurance is underwritten by Plymouth Rock Assurance Corporation and Palisades Insurance Company. Each company is a separate legal entity that is financially responsible only for its own insurance products. Actual coverage is subject to the language of the policies as issued by each separate company.