What is Bodily Injury, Property Damage, Comp Coverage, and Collision?

coverages auto insurance blog pic

Have you ever taken a look at your insurance policy and thought to yourself what the hell does all of this mean?  Everybody knows they need insurance for their vehicle to protect it from harm.  You may know why you need insurance, but do you really understand what insurance is?

In regard to your Auto Policy, it is crucial that you understand all the different parts of the car insurance policy, because you may be under or over insured. How do you know how much coverage to ask for, if you don’t even know what bodily injury means?

WHAT IS BODILY INJURY?– Bodily injury liability coverage will pay if an insured is legally obligated to pay damages due to bodily injury to others arising from an accident (i.e. a covered loss). Coverage amounts are selectable in split limits (such as 50/100, 100/300 etc). The first limit indicates the maximum amount (in thousands of dollars) that can be paid in any one accident to any one person for injury or death. The second limit indicates the maximum amount (in thousands of dollars) that can be paid in any one accident (occurrence) for all persons for injury or death. The policy also provides for legal defense costs, subject to provisions in the policy.

WHAT IS PROPERTY DAMAGE? – Property Damage liability coverage will pay for accidental property damage caused by an insured driver to someone else’s property when the insured driver is legally responsible. The limit shown on screen is per accident (occurrence), and is in thousands of dollars. (Example: ’50’ means $50,000). The policy also provides for legal defense costs, subject to provisions in the policy.

WHAT IS NO LIMITATION ON LAWSUIT? – Selecting ‘Yes’ for this coverage option will give the insured the right to sue the person who caused an accident for pain and suffering for any injury.  Selecting ‘No’ means that the insured agrees not to sue the person who caused an auto accident for their pain and suffering unless they sustain one of the following, permanent injuries listed here: loss of a body part, significant disfigurement, displaced fracture, loss of a fetus, permanent injury, death.

WHAT IS UNINSURED MOTORISTS PROPERTY DAMAGE? – Personal Auto Insurance that provides coverage for property damage if the insured is involved in an accident with an uninsured motor vehicle.

WHAT IS UNINSURED/UNDERINSURED MOTORISTS BODILY INJURY, UM/UIMBI? – Personal Auto Insurance that provides coverage for injuries if the insured is involved in an accident with an underinsured, at-fault driver. Coverage amounts are in split limits (ie – 50/100, 100/300 etc). The first limit indicates the maximum amount (in thousands of dollars) that can be paid in any one accident to any one per person. The second limit indicates the maximum amount (in thousands of dollars) that can be paid in any one accident for all persons.

WHAT IS COMPREHENSIVE COVERAGE? – Covers the insured vehicle for physical damage arising from perils other than collision. Refer to the policy for specific definitions and exclusions. Coverage is subject to the deductible selected in Express.

WHAT IS COLLISION? – Covers physical damage to the insured vehicle (less any deductible selected) when the damage is caused by a collision with another car or object as defined in the policy.

WHAT IS RENTAL REIMBURSEMENT? – This coverage reimburses the insured for the lesser of actual daily rental charges or the purchased limit option for a maximum of 30 days for each qualified disablement on a covered vehicle. A qualified disablement means a loss covered by the Comprehensive or Collision sections of the policy. Rental Reimbursement may be purchased for any vehicle covered by Comprehensive and Collision coverages. The limit options shown in Express are per day amounts.

Hopefully after reading about some of the most important coverages on an auto policy, you have a better understanding of your car insurance policy and feel more comfortable about it.  One thing I want to point out about this blog post is that I did not touch upon PIP which stands for Personal Injury Protection.  I did not mention PIP in this particular blog post, but it is the MOST IMPORTANT COVERAGE on an auto policy. Being that PIP is so important and is a MANDATORY COVERAGE in the state of New Jersey, if you haven’t already you should read my earlier blog post entitled, “What is PIP?”

In summary, there is a lot to be learned about car insurance and its coverages. If you have questions or concerns about your policy or simply want to learn more, please don’t hesitate to give me a ring at 973.394.0212 or shoot me an email at jarcher@farmersagent.com. You can also find me online at www.farmersagent.com/jarcher.

Thanks,

Jason Archer

Agency Owner at the Archer Group – Farmers Insurance Agency

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