INSURANCE 101

Understanding Auto Insurance Coverage

 

Whether you're driving a new car, a certified pre-owned vehicle, or an older used or collectible car, you'll need to purchase an auto insurance policy before you take to the road. However, the specific kind of insurance, as well as the coverage amounts and options, can vary depending on your needs, comfort zones, and the value of your vehicle.

To help better understand a bit more about auto insurance, it might help to first learn some of the most common terms...

Liability Insurance

Covers your legal liability for a covered accident that involves injury to another person or damage to someone's property, up to the limit of liability you select.If your limits are 15/30/10, this means:

 

No more than $15,000 would be paid per person for Bodily Injury

No more than $30,000 would be paid per accident for Bodily Injury

No more than $10,000 would be paid per accident for Property Damage

 

Example:You are at fault for an accident that injured two people and damaged another vehicle. The other driver's total medical bills were $1,000 and the other passenger's total medical bills were $1,500. The damage to the other vehicle was $5,000. All injuries and damages would be covered because they fall within the Liability limits you selected. Each person's injuries were less than $15,000, and the amount for all injuries was less than $30,000. The other vehicle's damage also was below the $10,000 Property Damage Liability limit.

On the other hand, if you are at fault for an accident and the medical bills from the injuries or property damage that you cause exceed your limits of liability, you are responsible for the remaining damage, which might put your personal assets at risk.

 

Comprehensive & Collision

Comprehensive and Collision coverages pay to repair or replace your auto if it is stolen or damaged in an accident, regardless of who is at fault. For each coverage, you select a deductible that you pay out of pocket. Your insurance company pays for the remaining damage up to the limits you select.

 

With Collision coverage, your insurance company pays for damage to your auto when you collide with another vehicle or object. If you hit a car, a pole or another nonliving object, Collision coverage will apply. With Comprehensive coverage, your insurance company pays for damage to your auto caused by an event other than a collision, such as fire, theft or vandalism. If you hit an animal, or if your auto is flooded or stolen, Comprehensive coverage will apply.

Uninsured/Underinsured Motorist

When the person at fault for an accident does not have insurance, Uninsured Motorist Bodily Injury will cover injuries and damages you incur that the at-fault party is legally liable for, such as medical treatment and lost wages up to the limits you select. If your injury expenses exceed the at-fault party's Liability limits, you can use Underinsured Motorist Bodily Injury coverage to pay for the amount not covered by the at-fault person's insurance. Similar to Uninsured Motorist coverage, Underinsured Motorist coverage is designed to cover the gap between the other person's Liability limits and the amount of your injury expenses, up to the Underinsured Motorist limits you select.

 

If the driver or owner of a vehicle is legally liable for an accident but does not have insurance or does not have enough insurance, you can use Uninsured/Underinsured Motorist Property Damage (UMPD) to cover damage to your insured auto, up to the limits you select. In some states, UMPD is available as an alternative to Collision coverage. Certain exclusions may apply. Refer to your policy.

 

Example:A driver who has no insurance rear-ends your car while you're sitting at a stop sign. Your car has $2,000 in damage. You go to the doctor because your neck is hurting, and your total medical bills equal $300. Your Uninsured Motorist limits are $20,000/$40,000/$15,000, which means your injuries and the damage to your car fall within these limits and will be covered

Rental Reimbursement

Rental Reimbursement provides rental car coverage if you have a claim that is covered under Comprehensive or Collision coverage. Daily rental amounts are subject to the limit purchased.

If you purchase Rental Reimbursement for $30/day, you will be reimbursed up to $30 per day, up to 30 days, for rental charges you incur due to a claim covered by your Comprehensive or Collision coverage.

Medical Payments

Medical Payments (MedPay) coverage pays the cost of necessary medical care you receive as a result of an auto accident and can be used regardless of who is at fault. MedPay often is limited to medical treatment received within the first three years after an accident and is limited to a specific dollar amount. In some states, MedPay only applies after other medical insurance is exhausted. Refer to your policy for details.

 

Example:You sustain $2,000 in injuries from an accident in which you ran into a tree. You do not have any health insurance, which means you can use your Medical Payments coverage, up to the $1,000 limit you selected, for your injuries. You are responsible for the other $1,000 in medical bills.

Roadside Assistance

Protect yourself and your loved ones against potential roadside hazards with a Roadside Assistance Program. Roadside Assistance Programs are available as part of an auto insurance policy or as stand-alone protection against mechanical breakdowns, flat-tires, lock-outs and other unplanned travel incidents.

Roadside Assistance coverage provides towing services, mechanical first-aid, tire service, battery service and delivery of emergency supplies of gasoline, water, oil or other accessories as required and available. Travel with the confidence of Roadside Assistance Protection.

The Roadside Assistance program also provides the following services:

·         24-Hour Assistance

·         Locksmith

·         Theft Hit and Run Protection

·         Nationwide Toll-free 800 Number

·         Bilingual Customer Service

·         Free Map Routing

·         Rental Car, Hotel and Theme Park Discounts

Roadside Assistance coverage is available 24/7 and can be purchased as a stand-alone option or as a part of your auto insurance package. Don’t be left without the safeguard of roadside assistance. Chat Live or call 1-800-300-0227 to talk to a customer service representative about the Roadside Assistance Program.

You can also email customer service for more information about the Roadside Assistance Programs or for answers to other insurance related questions.

Loan/Lease Payoff

Loan/Lease Payoff coverage pays the difference between what you owe on your vehicle and what your insurance pays if your vehicle is declared a total loss or stolen and not recovered, less your Comprehensive or Collision deductible. Both Comprehensive and Collision coverage are required before you can add Loan/Lease Payoff to your policy.

You can purchase Loan/Lease Payoff coverage for vehicles that you lease or for which you have an unpaid loan. This coverage is only available if your loan or lease is held by a financial institution, not an individual.

After your Comprehensive coverage or your Collision coverage has paid you the actual cash value for your vehicle, less your deductible, your Loan/Lease Payoff coverage will pay the difference between the actual cash value and any additional amount you owe under the terms of your vehicle lease or loan (excepting fees and charges). However, the payment made under this coverage may not exceed 25 percent of the actual cash value.