Auto Insurance coverages explained

The following is a basic description of the coverages for a typical Automobile insurance policy. It is by no means a complete representation of coverages afforded by a particular policy. For a complete description, you would need to read your policy.

Bodily Injury and Property Damage Liability:

Bodily Injury and Property Damage Liability covers your legal liability for a covered accident that involves injury to another person or damage to someone’s property, up to the limit of liability you select.

If your limits are 15/30/10, this means:

• No more than $15,000 would be paid per person for Bodily Injury
• No more than $30,000 would be paid per accident for Bodily Injury
• No more than $10,000 would be paid per accident for Property Damage

Example:
You are at fault for an accident that injured two people and damaged another vehicle. The other driver’s total medical bills were $1,000 and the other passenger’s total medical bills were $1,500.

The damage to the other vehicle was $5,000. All injuries and damages would be covered because they fall within the Liability limits you selected. Each person’s injuries were less than $15,000, and the amount for all injuries was less than $30,000. The other vehicle’s damage also was below the $10,000 Property Damage Liability limit.

On the other hand, if you are at fault for an accident and the medical bills from the injuries or property damage that you cause exceed your limits of liability, you are responsible for the remaining damage, which might put your personal assets at risk.

Uninsured/Underinsured Motorists Coverage:

When the person at fault for an accident does not have insurance, Uninsured Motorist Bodily Injury will cover injuries and damages you incur that the at-fault party is legally liable for, such as medical treatment and lost wages up to the limits you select.

If your injury expenses exceed the at-fault party’s Liability limits, you can use Underinsured Motorist Bodily Injury coverage to pay for the amount not covered by the at-fault person’s insurance. Similar to Uninsured Motorist coverage, Underinsured Motorist coverage is designed to cover the gap between the other person’s Liability limits and the amount of your injury expenses, up to the Underinsured Motorist limits you select.

If the driver or owner of a vehicle is legally liable for an accident but does not have insurance or does not have enough insurance, you can use Uninsured Motorist Property Damage (UMPD) to cover damage to your insured auto, up to the limits you select. In some states, UMPD is available as an alternative to Collision coverage. Certain exclusions may apply. Refer to your policy.

Example:
A driver who has no insurance rear-ends your car while you’re sitting at a stop sign. You go to the doctor because your neck is hurting, and your total medical bills equal $3,000. Your Uninsured Motorist Bodily Injury limits are $15,000/$30,000, which means your injuries fall within these limits and will be covered.

Medical Payments:

Medical Payments (MedPay) coverage pays the cost of necessary medical care you receive as a result of an auto accident and can be used regardless of who is at fault. MedPay often is limited to medical treatment received within the first three years after an accident and is limited to a specific dollar amount. In some states, MedPay only applies after other medical insurance is exhausted. Refer to your policy for details.

Example
You sustain $2,000 in injuries from an accident in which you ran into a tree. You do not have any health insurance, which means you can use your MedPay coverage, up to the $1,000 limit you selected, for your injuries. You are responsible for the other $1,000 in medical bills.

Physical Damage Coverages (Comprehensive and Collision):

Comprehensive and Collision coverages pay to repair or replace your auto if it is stolen or damaged in an accident, regardless of who is at fault. For each coverage, you select a deductible that you pay out of pocket. Your insurance company pays for the remaining damage up to the limits you select.

With Collision coverage, your insurance company pays for damage to your auto when you collide with another vehicle or object. If you hit a car, a pole or another nonliving object, Collision coverage will apply.

With Comprehensive coverage, your insurance company pays for damage to your auto caused by an event other than a collision, such as fire, theft, glass breakage or vandalism. If you hit an animal, or if your auto is flooded or stolen, Comprehensive coverage will apply.

Rental Car Coverage: (Available only when physical damage coverage afforded)

Rental Reimbursement provides rental car coverage if you have a claim that is covered under Comprehensive or Collision coverage. Daily rental amounts are subject to the limit purchased.

If you purchase Rental Reimbursement for $30/day, you will be reimbursed up to $30 per day, up to 30 days, for rental charges you incur due to a claim covered by your Comprehensive or Collision coverage.

Roadside Assistance/Towing Coverage:(Available only when physical damage coverage afforded)

Roadside Assistance coverage provides reimbursement for towing to the nearest qualified repair facility and covers a specified amount of the necessary labor at the place of breakdown when your automobile is disabled due to any of the following:

• Mechanical or electrical breakdown
• Dead battery
• Flat tire
• Lockout
• Insufficient supply of fuel, oil, water or other fluids
• Entrapment in snow, mud, water or sand within 100 feet of the roadway