Stay informed and protected while you're on the road. Explore these common vehicle insurance coverages to determine which is the best fit for you.

Are you confused about the difference between liability and comprehensive coverage? Heard the words "GAP Insurance" but not sure if it's the right choice for you?

Don't stress. We've got you covered with clear definitions, relevant statistics, and examples to help you make the most informed decision possible. 

Liability insurance: keeping you and others safe.

Liability insurance is there to help if you accidentally cause harm to someone or damage their property. Liability coverage has two components:

Bodily injury liability may help pay for medical expenses for the other person, if you were at fault for the accident. Here's how it works: Let's say you ran a red light and hit another car, and the person in the other car gets hurt and needs to go to the hospital. If you have bodily injury liability insurance, you won't have to pay all the medical bills for the other person out of your own pocket.

Property damage liability may help pay for damage you cause to another person's property while you were driving. Here's an example of that: While leaving for work, you back in to your neighbor's fence. No one got hurt, except the newly painted wood fence your elderly neighbor just finished has been destroyed. Property damage liability insurance will ensure that you aren't paying for everything out of pocket when replacing the fence (and hopefully your elderly neighbor will understand that accidents happen). 

According to Louisiana regulations, everyone is legally required to have liability coverage on every vehicle they own.

Uninsured and underinsured motorist coverage: your safety net.

Remember the liability insurance we just covered? Well unfortunately, not everyone gets the chance to read this article.

Meeting a driver without insurance is more common than you'd think. In fact, about one in eight drivers were uninsured in 2019, according to a 2021 study by the Insurance Research Council (IRC).

If one of those uninsured drivers causes damage to your car or causes you harm in an accident, uninsured motorist coverage is there to help. It pays for repairs or medical bills when the other person's insurance can't.

Comprehensive coverage: guarding against surprises.

Life is full of surprises, and so is the road.

Comprehensive coverage protects you from things you can't control, like hailstorms or falling branches. Imagine your car getting dinged by hail—comprehensive coverage steps in to pay for the repairs. It makes sure you're not stuck with the bill for things you didn't see coming.

Collision coverage: your lifeline in accidents.

Accidents can happen, and that's where collision coverage comes in.

If your car crashes into something, this coverage pays for the repairs or a new car. It's especially helpful if you're still paying for your car, making sure you're not left with a big bill after an accident. In fact, most places won't even sell you a car without collision coverage, if you don't plan to buy it outright. 

While liability coverage pays for the damages to the other person's vehicle, collision coverage ensures that your car gets fixed or replaced, too.

GAP insurance: closing the money gap.

GAP stands for Guaranteed Asset Protection. It's an optional add-on coverage that can be a real lifesaver.

Picture this: You're in a bad accident, and your car is extensively damaged. Your mechanic drops the bomb—your car is totaled. You have collision insurance, but here's the catch. Your car is three years old, and its actual cash value is only $20,000. However, you still owe $25,000 in payments on it! Now, you've got a financial gap to bridge, and that's where GAP insurance steps in (minus your deductible).

Contrary to what some might think, gap insurance doesn't mean your insurance provider pays you the full amount you originally paid for your car. Instead, it comes to your rescue by covering the financed amount you currently owe on your car at the time of a covered accident. So, in our example, if you owe $25,000 on your car, gap insurance helps cover that amount (minus your deductible), sparing you from the financial hit.

Relevant article: Is it wise to get a protection plan?

Making sure you stay safe on the road is more than just having the right insurance—it's about making informed decisions. If you're thinking about streamlining your vehicle expenses, think about refinancing. Louisiana FCU's vehicle refinance program can save you money and give you the peace of mind you deserve. Drive with confidence.

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