What Do Those Coverages On My Auto Policy Mean?
When you purchase an auto insurance policy you are buying numbers. Those numbers will determine how your claim is settled if you are involved in an accident. The coverage limits will have the power to make a bad day just a minor blip--or a very, very bad day indeed!
Looking at your ID Card
Admit it--when you received your policy you glanced at it and then tossed it in a drawer. Can you even find it? Do you know where your ID cards are? That officer standing by your car isn’t going to have a smile on his face when you can’t produce a current card! Take a picture of your ID card with your phone then put those cards in the glove box. Someday you will very be happy you took 5 minutes to do that when you weren’t stressed.
Liability Limits A/B/Cs
Okay, now let’s look at that policy. The first numbers you will see are generally your liability coverage. The first number of your liability coverage is for Bodily Injury (per person). Then there will be a higher number (per accident). That coverage is to protect the “other guy”. Sorry, you can’t claim any of it for yourself! It will cover any injury you cause, up to the limits of those numbers. After the bodily injury numbers, there will be a Property Damage number. Again, this is coverage for “the other guy”. This will replace or repair any damage you cause to the property of “others”.
More Than Band-Aids
Next up is Medical Payments. Finally, something for you. Medical Payments will pay up to the limits of your policy for you, or anyone in your vehicle with injuries, regardless of fault, due to a covered accident.
In Case of Dummies...
Uninsured/ Underinsured Motorists is the coverage you carry to pay for damages to you from--wait for it--an uninsured or underinsured motorist. And yes, it’s unfair to have to cover yourself from someone who is driving illegally without insurance. Unfortunately, while it’s unfair, NOT having this coverage can leave you with damages that aren’t covered to yourself or your vehicle. Of this coverage, the Property Damage portion will pay for your vehicle repair or the cash value of your your vehicle if it is totaled.
Weather, Deer, and Trees, Oh My!
The physical damage portion of your policy will pay for damages to your vehicle. Collision Coverage will pay for collision or rollover damage to your vehicle minus your deductible. Comprehensive Coverage pays for damage to your vehicle from wildlife, weather, a tree falling on your vehicle, fire, or theft. Again, less your deductible. The deductible is a number you chose--it is the amount of loss you are willing to pay out of your pocket. The higher your deductible, the less your policy will cost.
So take that policy out of your drawer and really look it over. Now you understand what those numbers you purchased really mean! If you need more information your agent will be happy to help you. If you want to know why you need numbers higher than those crummy state minimum limits, well, that is another blog post. Stay tuned!
Pro Tip: Many companies have online access to quickly view your auto policy (some even have a phone app!)