Most auto policies are comprised of a variety
of coverages. The actual terminology, and the
minimum required insurance will vary by state.
Sample Policy Coverage Example
|
Coverages
|
Limits or Deductibles
|
Bodily Injury Liability
Each Person/Each Occurrence
|
$100,000/$300,000
|
|
Property Damage Liability
|
$50,000
|
Uninsured Motorist
Each Person/Each Accident
Property Damage
|
$100,000/$300,000
$50,000/$250,000
|
|
Medical Payments (PIP)
|
$2,500
|
|
Comprehensive
|
$500 Ded.
|
|
Collision
|
$500 Ded.
|
|
|
General Definitions
(Consult your insurance policy for
terms and conditions applicable to you)
Bodily Injury Liability covers injuries to someone
else caused by the policyholder or driver (if different)
of the insured car. Usually shown as two numbers, the
first being per person, and the second for the entire
accident.
Property Damage Liability covers "injuries" to property
caused by the policyholder or driver (if different) of
the insured car. This is primarily damage to another
car, but could also be to other physical property.
Uninsured Motorist coverage will reimburse you if you
are involved in a hit-and-run, or hit by an uninsured
motorist. Like with liability, there can be a bodily
and property component to the coverage.
Medical Payments or Personal Injury Protection can
pay for medical-related costs incurred by the policyholder
or driver (if different), and others in the covered vehicle,
or in other vehicles. This coverage can also assist if you
get hit as a pedestrian. This is an optional coverage in
some states, as the things it covers are sometimes already
covered by a policyholder's health insurance.
Collision covers you for damage to your car in an
accident. This coverage comes with a deductible. A higher
deductible will reduce your premium, although you are taking
on the risk of more out-of-pocket expense should you have a
claim. This is an optional coverage, although generally
required if you have a car loan. As your car ages and
decreases in value, some people choose to remove this
coverage from their policy.
Comprehensive covers you if the car is stolen, or
if your car is involved in accidents not covered under
collision, such as if your car strikes a deer. This
coverage can also reimburse you for cracked windshields.
Same issue as with collision regarding a deductible.
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