|When you buy an auto insurance policy,
you are buying a package of individual insurance coverages. Each insurance coverage protects
you against different types of losses. Once you understand the various insurance
coverages, you can decide which ones to include in your personal auto insurance
package. You can also determine the limits of automobile insurance coverage you will need.
The following are some common insurance coverages found in an automobile insurance policy. NOTE
- Your auto insurance policy may not contain all of these insurance coverages.
Bodily Injury (BI) Liability Coverage
pays up to the insurance coverage limits, for damages due to injury or death
of others in a vehicle accident for which you or the operator of your
vehicle are legally responsible. It also pays your legal defense costs.
In most states this insurance coverage is mandatory.
Property Damage (PD) Liability Coverage
pays up to the insurance coverage limits, for another individual's vehicle or
property that has been damaged in an automobile accident for which you or the
operator of your vehicle is legally responsible. In most states this insurance
coverage is also mandatory.
Medical Payments Coverage pays up
to the insurance coverage limits, for reasonable and necessary doctor, hospital
and funeral expenses for you and your passengers injured or killed
in an auto accident, regardless of who is at fault. Payments are usually
limited to one to three years after the auto accident. This coverage is
optional in most states without no-fault automobile insurance systems.
Uninsured/Underinsured Motorists (UM/UIM)
Coverage pays up to the insurance coverage limits for pain and suffering
which is not covered by medical, disability and PIP. Underinsured
motorist insurance coverage pays for bodily injury to you or your family resulting
from the negligence of someone whose automobile liability insurance limits are
insufficient. The definition of an underinsured motorist varies from
state to state.
Collision Coverage pays up to the
insurance coverage limits, for damage to your vehicle or a vehicle you are operating
caused by a collision or rollover. This auto insurance coverage is usually required
if you have a vehicle loan.
Comprehensive Physical Damage Coverage
pays up to the insurance coverage limits, for damage to your vehicle or any
vehicle in your custody resulting from theft, fire, vandalism, flooding,
hail or other perils (but not damage by collision or overturning).
It is usually required if you have a vehicle loan.
Rental Reimbursement pays up to a specified amount for rental vehicle
charges while your vehicle is being repaired for damage covered
under your auto insurance policy. If you prefer not to incur the cost of renting
a vehicle yourself and cannot be without a vehicle while yours is
being repaired, you might consider this insurance coverage.