Auto Insurance Coverage Explained
But What do All of these Coverages Mean? Read below to get a general idea of the coverages you will see on an auto insurance quote.
There are two thresholds for Liability:
"No Limitation on Lawsuit" also known as non-verbal or zero threshold option. This option is an unlimited right to sue the person who caused an auto accident for pain and suffering for any injury.
"Limitation on Lawsuit" also known as verbal threshold. This option limits the right to sue the person who caused an auto accident for pain and suffering to six (6) permanent injuries* instead of any injury. This option does not limit the ability to sue for economic damages, such as medical expenses and lost wages.
* Six (6) permanent injuries: 1) Loss of body party, 2) Significant disfigurement or significant scarring, 3) Displaced fracture, 4) Loss of a fetus, 5) Permanent injury*, and 6) Death.
There are different coverage limits to choose from, but here is what they generally mean.
Coverage for Others if an Accident is Your Fault
BODILY INJURY LIABILITY AND PROPERTY DAMAGE LIABILITY
Bodily injury liability and property damage liability coverages provide compensation for injuries to others, related legal expenses and damage your vehicle does to another person’s property if you cause an accident.
Coverage for You and Your Passengers
PERSONAL INJURY PROTECTION
Personal Injury Protection (PIP) is required on all auto policies. The limit you choose applies per accident to you and your family members, regardless of who is at fault in an auto accident. This coverage includes Medical And Funeral Expenses, Loss Of Income, and Replacement Services. There are options available as low as $15,000 and as high as $250,000.
ADDITIONAL PIP INCOME LOSS
Additional Personal Injury Protection (APIP) makes available higher limits than basic Personal Injury Protection (PIP) for income continuation, essential services benefits, funeral expenses and death benefits.
UNINSURED / UNDERINSURED MOTORISTS BODILY INJURY AND PROPERTY DAMAGE
Uninsured/Underinsured Motorists Bodily Injury and Property Damage helps pay for the cost of accident-related damage to your vehicle when the at-fault driver has no insurance or not enough insurance. A deductible may apply.
Coverage for Your Vehicle
Collision Coverage helps pay for damage to your vehicle if you are in an accident with another vehicle or object, or if your vehicle rolls over. Collision coverage is usually required when your car is leased or financed.
Comprehensive Coverage covers non-collision related damage to your vehicle, such as theft, vandalism or fire. It also covers other incidents such as a tree falling on your car during a windstorm, or while driving, you strike a bird or animal.
Roadside Assistance Coverage provides and pays for covered towing and labor costs if your vehicle breaks down.
With rental or substitute transportation coverage, you may be reimbursed for a rental car if your vehicle is damaged in a covered incident. Coverage applies only to the vehicles for which you've bought rental coverage for.
Leverage all the discounts your carrier has to offer and that you are eligible for.
SAFE DRIVER: Households that meet certain qualifications - such as no accidents, violations or major comprehensive claims, over a certain timeframe (such as the past 5 years) may qualify for this discount.
MULTI-POLICY: The Multi-Policy Discount provides savings for customers that have one or more qualifying personal insurance policies with the same carrier in addition to their auto insurance policy.
GOOD PAYER: The Good Payer Discount is for customers that consistently pay their auto insurance bill on time for a period of time (such as three years).
EFT: This discount provides savings for customers that select an Electronic Funds Transfer (EFT) billing plan and have their auto insurance premium automatically deducted from their checking or savings account.
PAID IN FULL: This discount provides savings for customers who select a lump-sum billing plan and pay their auto insurance premium in full.
CONTINUOUS INSURANCE: The Continuous Insurance Discount generally applies for customers who have continuously maintained auto insurance under any auto insurance policy for a certain period of time. The more years of continuous insurance the better the discount.
EARLY QUOTE: The Early Quote Discount generally applies for customers who obtain an auto insurance quote a certain length of time (such as 10 or more days) in advance of the effective date of their new auto insurance policy.
ANTI-THEFT: The Anti-Theft Discount applies to vehicles equipped with a qualifying anti-theft device.
MULTI-CAR: Customers who insure more than one car on an auto policy qualify for our Multi-Car Discount.
TELEMATICS: Telematics are usually 90 day driving programs that use a smartphone app to capture data and score how safely you drive. Some carriers offer an upfront discount during the first policy term. When their policy renews, safe driving habits can leads to larger discounts, while riskier driving habits can result in a higher premium.
Hope this helped!
"Disclaimer: The content contained in this blog is for informational purposes only. It should not be considered insurance advice since every client's needs and circumstances are different.. Bergen Insurance Group, LLC makes no representation as to accuracy, completeness, currentness, suitability, or validity of any information on this site and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All statements represent the sole opinion of the author and is provided on an as-is basis. For an actual description of all coverages, terms and conditions, refer to your insurance policy.”