Typical auto insurance coverages and what they mean
Bodily Injury Liability Limit:There is a limit to what your auto policy will pay out for injuries which you are responsible for causing
to others. This is known as you bodily injury liability limit. Liability limits are usually expressed in thousands of dollars. This
limit may be what is known as a split limit, where it has a per person limit as well as a per accident limit; or as a combined single
limit (CSL), where the bodily injury and property damage liability limits are combined. An example of a common split limit coverage would be
100/300. Expressed in thousands, this means your policy would pay out up to $100,000 per person for a total of $300,000 per accident for
injuries you've caused to other people. A typical CSL policy might be $300,000 or $500,000. In this example, the maximum payout
is given, with no specific cap per person. It's important to note that a CSL policy includes property damage liability and bodily injury
liability in one limit.
Property Damage Liability:This is the limit your policy will pay, in thousands of dollars, for damage you cause to the property
of others. This property can include other vehicles, lawns, public property (i.e. road signs, utility poles, etc.) On a split limit policy,
this amount is seperate from bodily injury liability. In a CSL policy, this amount is included in the combined limit.
Medical Payment coverage:Often times an insurance policy will include medical payments coverage (medpay) to help cover the costs
of health insurance deductibles for persons in your vehicle. If available, this coverage is paid without regard to fault, meaning if you hit
someone, or they hit you, this amount will be available to help pay your medical expenses.
Uninsured/Underinsured Motorist Bodily Injury:Also referred to as UM/UIM BI, this coverage can be added to your auto policy as
an endorsement. It provides compensation, up to the policy limits, for injuries sustained by you or your family in the event you are hit
by a driver who doesn't have any insurance or doesn't have enough insurance. (A recent study indicates as many as 1 out of 4 drivers do not
have liability insurance.) This coverage can also apply if you or an immediate family member are struck as a pedestrian.
It also includes many coverage for many things not covered by health insurance, such as pain and suffering, time off work, etc.
Uninsured/Underinsured Motorist Property Damage:This coverage, also referred to as UMPD, covers costs to repair your vehicle
(minus your deductible) if you are hit by a driver without insurance, or without enough insurance. Often used to cover vehicles in which
the insured chooses not to carry collision coverage. It may also provide coverage in the event your vehicle is involved in a hit/skip accident,
where the other driver cannot be identified.
Comprehensive Coverage:Also commonly called "comp" coverage, or "other-than-collision" coverage, this coverage pays for the cost
to repair your vehicle (minus your deductible) resulting from most any damage not caused by collision. This can include, but is not limited to
damage from: fire, hail, vandalism, theft, rock/stone, glass damage, wild animals, etc. Note that contact with animal or fowl, for example hitting
a deer, would be paid under your comprehensive coverage. Striking any other object or vehicle does not fall under this coverage. A deductible
typically applies to this coverage.
Collision Coverage:Collision coverage pays the cost to repair your vehicle in the event you collide with another object. An auto accident
in which you are at fault falls under this coverage. It will also pay to repair your vehicle if it is struck by an uninsured or underinsured
motorist. A deductible typically applies to this coverage.
Rental Reimbursement Coverage:Pays for the cost of a rental vehicle in the event your vehicle needs to be taken out of service for
repairs from a "covered loss". This coverage can usually only be purchased when comp and collision coverage are purchased on a vehicle. Most
auto policies limit rental reimbursement to an amount per day, as well as an occurence limit. For example, $30 per day for a maximum of $900
would provide you with a rental car for up to 30 days for a covered loss.
Towing and Labor Reimbursement:Sometimes refered to as "roadside assistance coverage," this will pay for the cost to tow your vehicle
to a service shop for repairs (up to your policies limit, typically $50). This tow does not have to come from a covered loss. Some companies will
also pay for someone to bring gas to your vehicle if you run out, or unlock your doors in the event you lock your keys in your vehicle.
Additional Equipment:This coverage can be purchased as an endorsment to cover items installed in your vehicle which were not originally
included with the vehicle. This can cover such items as CD changers, CB radios, GPS systems, etc.
Loan/Lease Payoff Coverage:This coverage, also referred to as "gap coverage" will cover the difference between what your vehicle is worth
(in the event of a total loss) and what you may owe on the vehicle. Most policies offer this coverage as an endorsement, with a maximum additional
payout on the vehicle. The additional limit may range from 20% to unlimited.
Additional Auto Insurance Terms
Full Coverage:This is a term often used to describe comprehensive and collision coverage together on a vehicle. It should be noted
that there are other coverages available which are not included in the general term "full coverage".
Total Loss:  Used to describe a vehicle whose cost to repair after a covered loss, is worth more than the fair market
value of the vehicle. This is what an insurance adjuster commonly refers to as simply a "totaled vehicle". In this case the insurance
company will pay you fair market value of your vehicle, minus your deductible.
Deductible:  This term applies to comprehensive and collision coverage, when it pertains to an auto policy. It is the amount
you, as the insured, agree to pay out of your pocket in the event of a loss. A higher deductible means lower insurance premiums, but you
have to weigh the savings versus how much you will be able to comfortably pay out of pocket. Please consult your agent for more information
regarding available deductibles.
Please note: Insurance policy terms and limits may vary by jurisdiction. Descriptions of coverages on these pages are limited by the
terms, conditions, definitions and exclusions of individual insurance policy contracts. These examples are not representations of the
law. They are not intended to constitute legal, accounting or financial advice. The general examples given here may not apply in