Auto Policy Coverage Terms
If you are found at-fault in an accident, liability pays for repairs, medical costs for injuries
of others and other expenses like legal fees. Liability is typically broken down into
Bodily Injury and Property Damage. The limits are the maximum the company will pay. Anything
over the limits will be out-of-pocket for you, so selecting the correct limits is very
important.
Bodily Injury |
Pays for injury resulting from a covered accident or claim
Ex: Hospital bills, Pain and Suffering |
Usually listed as split limit, such as $100,000/$300,000 |
A maximum would be paid of $100,000 per person involved in an accident
|
OR |
A total of $300,000 per accident, regardless of how many people are involved
|
Property Damage |
Pays for physical injury to, destruction of or loss of use of tangible
property.
Ex: Someone's vehicle, a light pole or garage |
Shown as a single amount - $50,000 |
Bodily Injury |
Pays for injury resulting from a covered accident or claim
Ex: Hospital bills, Pain and Suffering |
Usually listed as split limit, such as $100,000/$300,000 |
A maximum would be paid of $100,000 per person involved in an accident
|
OR |
A total of $300,000 per accident, regardless of how many people are involved
|
Property Damage |
Pays for physical injury to, destruction of or loss of use of tangible
property Ex: Someone͛s vehicle, a light pole or garage |
Shown as a single amount - $50,000 |
Assume you have $100,000/$300,000 limits. If you cause an accident where one person has $150,000
of injuries, you would be responsible for the extra $50,000 that is above your $100,000
per person limit. At the same time, if you cause an accident where you hit a family of
four and each person suffers $100,000 of injuries, that would total $400,000. You would
be liable for the excess $100,000 since your Per Accident limit is $300,000.
When considering and selecting limits for your policy, it is important to take into account
the rising cost of medical services, the expense for emergency services (i.e. Life Flight)
and the loss of income or wages that can all be a part of the total amount.
Uninsured / Underinsured Motorist
Sometimes, drivers fail to carry auto insurance or, more often, they do not carry enough.
This is where your Uninsured/Underinsured Motorist coverage comes to the rescue. These
limits are usually the same as your liability limits. Sometimes they can be higher based
on what you choose.
Depending on your state, this is also where you can find coverage for a hit-and-run driver
when you cannot identify the driver to file the incident against their insurance
Medical Payments
Medical Payments is a coverage that pays for medical expenses you and others in your vehicle
incur due to a covered claim, regardless of fault. For example, if you have selected
$5,000 for Medical Payments and you have 3 people in the car when the accident takes
place, your policy will pay up to $5,000 toward each person in your vehicle to a maximum
of $15,000 total.