Those of us that deal with insurance every day take it for granted that most people understand our every-day language. Insurance is not something people really ever want to think about. Nobody likes paying their premium when renewal time rolls around. No one ever looks forward to filing a claim and dealing with an adjustor. So this blog is dedicated to some simple explanations of insurance terms and coverage. Each of the following covers a different part of your risk as a driver.
•LIABILITY: This kind of coverage will pay for repairs, medical costs for injuries suffered by others in the vehicle, plus additional expenses related to an accident such as legal fees, if you are determined to be at fault for an accident. At the time you purchase your policy, you set your liability limits and there are two parts to this coverage – Bodily injury liability and Property damage liability. The limits are the maximum amount your policy will pay out in the event of a claim. Any expenses above that set amount would come out of your pocket unless you have other insurance.
•COLLISION: If you hit another vehicle or an object, your collision coverage will pay for damages or repairs to your vehicle after you pay a deductible. In other words, if you have collision coverage with a $500 deductible and your repair cost is $1,500, your collision coverage will pay $1000 after you pay the first $500.
• COMPREHENSIVE COVERAGE: This might also be referred to as “other than collision.” It pays for damage to your vehicle if involved in something other than an accident. For example, if during a storm, a tree branch lands on the hood of your car or if you hit a deer while driving on vacation, some part of that loss will be covered if you have this coverage. This coverage also has a deductible attached to it.
•MEDICAL EXPENSES: This coverage pays for injuries that you, a family member or other passengers riding in your vehicle may suffer in an accident. This coverage responds regardless of who is at fault. It also pays for injuries you or your family members may incur while riding in other vehicles.
•UNINSURED/UNDERINSURED MOTORIST: This coverage pays for injuries and property damage you suffer while in an accident if the driver at fault is either uninsured or does not have enough insurance to cover your injuries and damages. If involved in a hit-and-run accident where the driver leaves the scene leaving you unable to file a claim on his insurance, this coverage comes into play.
•ROADSIDE ASSISTANCE: Many insurance companies offer this optional coverage. If you need towing services or assistance with a flat tire or dead battery, roadside assistance will provide that service for a very affordable premium.
•RENTAL REIMBURSEMENT: If your car is in the shop for an extended period and you need a vehicle, this coverage will provide that for you for a nominal premium.
We hope you never need to file a claim, but if you do the above coverages help to lessen the financial burden after an accident. You may be an expert driver, but you also have to trust that everyone else on the road is driving well and paying attention, too. Auto insurance provides a safety net when drivers make mistakes. Be sure to have a conversation with your agent about the best coverages for your family. Hopefully, better understanding the terms above will assist you in that conversation.