Trying to understand auto insurance is a wise move before buying a policy. This page breaks down the different coverages of auto insurance so you will have more guidance in choosing the right coverage.
Car Insurance normally includes different components, each with varying agreements, exclusions, and condition.
1. Bodily injury liability may be written independently or together with other coverage in your policy form. It covers physical harm caused to another person after a car accident. There are three conditions that must be met in order for the bodily injury to be covered. First, the person must be insured. Second, the insured must be legally responsible of the injury. Lastly, the bodily injury must be a result of the car collision.
If the bodily injury and/or physical damage is intentionally caused by the insured, no coverage will apply. Part A coverage settles any claim and suits that may be filed against you and will only end when the limit has been exhausted. The state minimum amount for liability coverage is split as follows:
Sometimes, it is expressed as 25/50/25.
Bodily injury is a broad term used to refer to physical harm in the body such as fracture, wound, or lacerations. It also includes sickness or disability that may come at a later time from the car accident. For example: loss of eyesight, traumatic brain injury, concussions, psychological disturbance and emotional distress. Other people aside from the policyholder may also be covered under Part A such as the following.
However, if you use the company’s car, your auto insurance will not cover anything because you are covered under the company’s insurance.
One important clause under Part A coverage:
2. Medical payments coverage reimburses the expenses that you incurred for hospitalization. It also includes funeral benefits in case a family member dies because of the car accident, regardless of who is at fault.
Unlike liability coverage, it does not pay for the passengers in another vehicle. The only covered individuals are as follows:
Part B coverage has a single limit of liability that applies to all injuries sustained by every person after a vehicular accident. You may choose from as low as $1,000, $2,000 and upwards to $100,000 depending upon your auto insurance provider’s available options.
The following are expenses that may be covered under Part B:
3. Coverage for uninsured motorists (UM) answers the question, “what if the other driver at-fault has no insurance?” Part C only covers compensatory injuries that you may have suffered in four conditions, It does not cover physical damage to your vehicle.
Compensatory injuries include both the physical and emotional harm that you have sustained from the car collision.
What is considered as uninsured motor vehicle?
Uninsured motor vehicle is the one that:
*Uninsured Motorists (UM) does not cover physical damage to your vehicle
4. Coverage for damage to your auto pays for loss resulting from the car accident OR events other than collision. You may purchase collision only or take both. Other than collision coverage is also known as comprehensive coverage. Its coverage includes:
If you purchase collision only, it means that you will only be reimbursed for damages incurred in an accident but you will not be covered against the open perils mentioned above.
If you want to have comprehensive coverage, you need to pay a separate deductible for other than collision coverage in addition to your collision coverage.
Coverage for Non-owned Auto
Transportation Expenses Coverage
Supposed that your car is totally wrecked from the accident, and you have to take the public transit while it is being repaired. Part D will reimburse the money you used for transportation. For example, it can pay up to $25 a day to a maximum limit of $500. This coverage is only active until your auto becomes usable again or the limit has been reached, whichever comes first.
If your car has been stolen, you will be covered until the car is returned. But if there is no sign that your car can be retrieved, the company will pay your for its loss.
Before Part D coverage for transportation expenses applies, you have to first bear with the required waiting period.
Note: You cannot collect duplicate payments for all types of coverage. For example, if you already have collected reimbursements for a loss covered in Part A, you cannot collect the same payment under Part B, Part C or Part D.
This means that if your broken windshield is caused by collision, you can treat it only as collision loss. But you cannot be reimbursed twice under other than collision.