Rob Worley of Richmond Virginia is a divorced 40yearold loan

Rob Worley of Richmond, Virginia, is a divorced 40-year-old loan officer at the Dominion Bank; he has a 16-year-old son. He has decided to use his annual bonus as a down payment on a new car. One Saturday afternoon in late December, he visits University Auto Mall and buys a new car for $28,000. To obtain insurance on the car, Rob calls his agent, Karen Cunningham, who represents Charter Insurance Company, and explains his auto insurance needs. Karen says she

Solution

Hello Pal,

First of all a very nice as well as intersting question from your side.

So now straight to the question, as asked above with all the information available from your side and from mine, the answer is as under:

1. Liability Insurance

Liability insurance covers you in the event you are in a covered car accident and it is determined the accident is a result of your actions. Liability insurance will cover the cost of repairing any property damaged by an accident as well as the medical bills from resulting injuries. Most states have a minimum requirement for the amount of liability insurance coverage that drivers must have. If you can afford it, however, it is usually a good idea to have liability insurance that is above your state\'s minimum liability coverage requirement, as it will provide extra protection in the event you are found at fault for an accident, as you are responsible for any claims that exceed your coverage\'s upper limit. You wouldn\'t want to run the risk of having to pay a large amount of money because your policy limit has been exceeded.

2. Collision Coverage

If there is a covered accident, collision coverage will pay for the repairs to your car. If your car is totaled (where the cost to repair it exceeds the value of the vehicle) in an accident, collision coverage will pay the value of your car. .

If your car is older, it may not be worth carrying collision coverage on it, depending on the value. On the other hand, if you have a more expensive car or one that is relatively new, collision insurance can help get you back to where you were before any damage to your car. Note: If you have a lienholder, this coverage is required.

3. Comprehensive Coverage

What if something happens to your car that is unrelated to a covered accident - weather damage, you hit a deer, your car is stolen - will your insurance company cover the loss? Liability insurance and collision coverage cover accidents, but not these situations. These situations are covered by Comprehensive (other than Collision) coverage.

Comprehensive coverage is one of those things that is great to have if it fits in your budget. Anti-theft and tracking devices on cars can make this coverage slightly more affordable, but carrying this type of insurance can be costly, and may not be necessary, especially if your car is easily replaceable. Note: If you have a lienholder, this coverage is required.

4. Personal Injury Protection

While Comprehensive coverage may be something you don