Auto Insurance Terminology Review
Even the most knowledgeable insurance consumers could use an occasional review of their auto insurance coverage terminology. If you have questions about your specific policy and company, it’s always best to talk to your agent. This is presented as general information.
- Liability Coverage. Provides payment for covered damages, up to the limits contained in the policy, if you’re legally responsible for injury to or the death of others, or if you cause damage to their property in an auto accident.
- Medical Expense. Pays for medical services for you and others in your vehicle regardless of who’s at fault. Also pays if you’re injured while riding in another vehicle or if struck by a vehicle as a pedestrian.
- Comprehensive Coverage. Pays for accidental loss or damage to your insured vehicle from most causes except collision or upset. Theft, fire, vandalism, collision with animals, falling objects, glass breakage, flood, hail, and windstorm are covered.
- Collision Coverage. Pays for accidental loss or damage to your vehicle caused by collision or upset, regardless of who’s at fault. Pays for accidental damages when a collision doesn’t involve another vehicle or if you have damage done in a hit-and-run accident.
- Uninsured Motorist Coverage. Pays up to the limits contained in policy for legally collectible damages for bodily injury or death if you or any person riding in your vehicle is injured or killed in an accident by an at-fault uninsured vehicle, or if the driver at fault is never identified.
- Underinsured Motorist Coverage. Provides payment for the same reasons as uninsured motorist coverage, except this would be an accident with a vehicle that has liability limits less than the Underinsured Motorist limits contained in your policy. It will pay the difference between the at-fault driver’s limits and the limits contained in your policy.
- Uninsured Motorist – Property Damage Coverage. Pays legally collectible damages for damage to your vehicle caused by a driver of an uninsured vehicle—not a hit and run. This is commonly added to a policy when collision coverage isn’t requested.
Optional coverage includes: emergency road service (not just towing), auto rental reimbursement (pays for vehicle rental due to a covered loss, though not if vehicle is in the shop for mechanical work), and accidental death and dismemberment (pays for death and certain injuries when riding in or struck by a vehicle, regardless of who’s at fault). TPW