Personal Auto Insurance policies are a package of coverages designed to provide financial responsibility (Liability) for the operation of a vehicle on state/interstate roads as well as for potential damage to the vehicle. As stated, a certain amount of Liability coverage is required by statute in most states, the other coverages shown below are optional. The most common types of coverages available in most Personal Automobile Policies are:
Liability Insurance: States require that each individual be listed as a drive on a personal automobile policy for a state mandated minimum amount of liability in order to maintain a drivers license. In addition, each vehicle bearing a state issued license plate must be listed on a personal or commercial automobile policy, again for at least the minimum about of liability required by the particular State.
Comprehensive: Comprehensive, aka Other than Collision, is one of the two physical damage coverages available in a Personal Automobile policy. Comprehensive covers causes of loss such as: Glass Breakage, Falling Objects, Fire, Theft, Flood, Hail, Vandalism, contact with a bird or animal. This is just sample of the types of non-collision type losses.
Collision: Collision is generally defined as the word implies, contact with another vehicle or object. A Hit-and-Run accident is a collision, although one vehicle was stationary. In this case, the stationary vehicle was collided with. However, as every word can have different interpretations, there are numerous situations which will cause one to carefully consider whether the actual cause of loss was Collision or Comprehensive and numerous court intepretations that aid in the proper settlement of claims.
Medical Payments: This is the no-fault portion of the Auto Policy that pays up to the amount stated on the policy, generally between $1,000 and $10,000, for persons injured by a vehicle, either being struck by the vehicle, or accidently closing the door on a hand or a finger, or being injured while getting out of a vehicle. These non-liability,
no-fault situations are intended to be covered by this line to pay the injured persons medical bills related to the vehicle.
Uninsured Motorists Coverage: This coverage, and its companion Underinsured Motorists, have become important as there appears to be an increasing number of persons operating/owning vehicles who do not maintain even the minimum amount of liability coverage. This coverage responds when the insured and or their vehicle is injured in an accident due to someone else’s negligence and the at-fault party does not have any liability insurance. Uninsured Motorists Coverage then steps in a pays the insured’s medical bills, damage to the insured’s vehicle and any other resultant damages in place of the at-fault party’s coverages. The limit is determined by the amount of the Uninsured Motorists Coverage purchased in the insured’s policy, which is typically recommended to be same as the liability limit the insured maintained in their personal auto policy. In this instance, we recommend you insure for your own injury/damages at least as well as you would insure against injury or damages you might have been liabile for.
Underinsured Motorists Coverage: This is the companion coverage to Uninsured Motorists Coverage discussed above. It works very similarly to Uninsured Motorists, except that it comes into play where the other at-fault party has liability insurance, but their limits are lower than those maintained by you and your Underinsured Motorists Coverage. For example, let’s say the at-faul party has liability limits of $50,000/$100,000 Bodily Injury and $25,000 Property Damage. However, you maintain $500,000/$500,000/$100,000 for each of Liability, Uninsured and Underinsured Motorists Coverage. Once the insureds lower limits are exhausted in paying your bills and resultant injuries and property damage, then your Underinsured Motorists Coverage will come in pay the difference from their $50,000 per person up to your $500,000 per person limit if needed.
Towing & Labor: This coverage applies when your vehicle is disabled and needs to be jumpstarted, towed or otherwise serviced on the road. The maximum amount paid for this type of loss depends on the limit purchased for each vehicle in the policy, typically from $25 to $100. There is a charge for each vehicle. This coverage ceases once a vehicle is towed to its destination and for no more than the policy limit.
Rental Reimbursement: This also known as Extended Transportation Expense in some policies. This coverage applies to a covered vehicle, meaning it has to be purchased for the specific vehicle and shown in the policy, which is not available to be used due to a cause of loss that is covered in the Physical Damage coverages available in the policy. Amounts available to be purchased are expressed as the maximum reimbursement amount per day and for the maximum 30 day period for which coverage will reimburse, such as $30/$900; $40/$120; or $50/$1,500.
There are numerous endorsements that are available for the Personal Automobile Policy which may be needed by an individual based on their particular needs.
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