November 1, 2010

Income Loss Coverage For Your Auto Insurance Policy

Income loss coverage is a type of car insurance that is not offered by every car insurance provider. The basic function of income loss coverage is to pay for a portion of a driver's lost wages after an accident. It can be a very helpful coverage if you are involved in a major accident that requires a hospital stay or an extended amount of sick leave. Income loss coverage is very similar to disability insurance coverage. Because it can provide thousands of dollars for an injured driver, it is worth considering when you look for a highly protective auto insurance quote.

The exact function of income loss coverage varies a bit from state to state. In some states such as Florida, it is grouped in with another type of coverage, usually personal injury protection coverage. In other states, it is a completely separate form of auto insurance, and thus, income loss coverage is treated on its own from an insurance standpoint. Because of the variations by insurance provider and by state, it is an excellent idea to find out more about your state's auto insurance law before considering this special type of coverage on your auto insurance quote. Talk to an insurance agent and read over the portion of your policy that offers income loss coverage. Make sure that it does not provide double coverage with any disability insurance policies that you have through your employer or which are held privately. Double coverage will usually negate one of the policies, and you will just end up wasting money on coverage that will not possibly come into play.

Different coverage amounts are available for income loss coverage. The amount of coverage that you purchase will be reflected as a percentage of your income and will usually be paid out on a weekly basis. Income loss coverage may or may not have a dollar maximum limit set when the coverage begins, so this is another thing to check before buying the coverage. The average income loss plan will pay for about two-thirds of a driver's lost income after an accident. Your insurance company may ask for proof of salary before offering you coverage, and it may ask for notification if your salary changes in order to provide you with an accurate auto insurance quote.

If you decide to purchase income loss coverage, you should buy an appropriate amount that will keep you living normally after a major accident. Talk to your insurer and your employer to make the best decision possible given your income, driving habits and other variables. Income loss coverage can cost you some money in monthly premiums, but it is worth the cost for many drivers.