What follows is a simplified, plain-language description of the most common categories of auto insurance
coverage and how they may benefit you.
Bodily Injury Liability
If another person is injured because of your carelessness or the carelessness of someone
driving your car, this coverage typically requires your insurance company to pay the personal injury claim.
The company's
obligation is limited, however, to the amount of coverage you purchased. For example, if your bodily injury liability
limits are $15,000 per person and $30,000 per accident, your company will pay no more than $15,000
to each injured person and no more than $30,000 total for any one accident, no matter how serious the injuries may be.
Property Damage Liability
This is similar to bodily injury liability except that it covers damage to another person's
automobile and other property rather than physical injuries. The company's obligation to pay also is limited to the amount
of coverage you buy.
Comprehensive
This category of protection generally requires your insurance company to pay for damage
to your car caused by something other than an auto accident (for example, fire, theft or vandalism).
The company's obligation to you will be limited by the amount of any "deductible" you may
have purchased. A $100 deductible means that you pay the first $100; the company pays the rest.
Collision
Your insurance company pays for damage to your car caused by an auto accident. Deductibles
also are common with this coverage.
Medical Payments
Your company will pay the reasonable medical expenses of anyone in your car who is injured
in an accident. Under this coverage, it does not matter who was at fault in the accident.
You and most
members of your household need not be in a car for this coverage to apply. For example, you also would
be covered if struck by a car and injured while you were a pedestrian.
As with liability insurance, the company's
obligation is limited to the amount of coverage you buy.
Uninsured Motorist
If an uninsured driver causes injury to you or other occupants of your car, this coverage will
pay your claims for physical injuries. It serves as a substitute for the bodily injury liability insurance
that the other driver did not have.
This coverage also is limited to the amount of insurance you buy.
As with medical-payments coverage, payment is not limited to automobile occupants.
Underinsured Motorist
If a driver injures you or your car's occupants, and his or her liability insurance is insufficient
to cover the full value of your claims for physical injury, this coverage will make up the difference.
Again, your company's obligation is limited to the amount of coverage you purchase. Like medical-payments
and underinsured-motorist coverage, it is not limited to automobile occupants. |
