What exactly is auto insurance? Well, it is an agreement between you and your insurance carrier. You pay the carrier a determined amount of money, which is called a premium, and in return the carrier will protect you from any major financial losses should you have an accident.
Auto Insurance Coverages
Automotive policies are bundled together along with various primary individual coverages. This makes up your premium. The most common coverages are:
- Bodily Injury Liability Coverage (BI): This pays for bodily injury or death that results from an accident at which you are at fault. It also provides you with a legal defense.
- Property Damage Liability Coverage (PD): Provides you with the protection you need should your car damage another person’s property during an accident.
- Medical Payments: Pays for the medical expenses of the driver and passengers in your car that are a result of an accident, regardless of whose fault the accident is.
- Uninsured Motorist Coverage (UM): Provides payment for injuries and certain property damage caused by a driver whom does not carry insurance.
- Underinsured Motorist Coverage (UN): This usually coincides with Uninsured Motorist Coverage, but is triggered when the at-fault driver has insufficient insurance coverage.
- Comprehensive Physical Damage: Pays for any damages to your car after a theft, vandalism, flood or fire.
- Collision Coverage: Pays for any damage to your car when it hits or is hit by another object.
- Additional coverages, such as Emergency Road Service (towing), Rental Reimbursement and Additional Expense are also available.