What is included in an auto policy?
When you buy an auto insurance policy, you are buying a package of individual coverages. Each coverage protects you against different types of losses. Once you understand the various coverages, you can decide which ones to include in your personal insurance package.
Individual coverage plans can include:
- Bodily Injury (BI) Liability Coverage
Covers damages due to injury or death of others in a vehicle accident for which you or the operator of your vehicle are legally responsible. It also pays your legal defense costs. In most states this coverage is mandatory.
- Property Damage (PD) Liability Coverage
Covers another individual’s vehicle or property that has been damaged in an accident for which you or the operator of your vehicle is legally responsible. In most states this coverage is also mandatory.
- Medical Payments Coverage
Covers reasonable and necessary doctor, hospital and funeral expenses for you and your passengers injured or killed in an accident, regardless of who is at fault.
- Comprehensive Physical Damage Coverage
For damage to your vehicle or any vehicle in your custody resulting from theft, fire, vandalism, flooding, hail or other perils (but not damage by collision or overturning).
- Uninsured/Underinsured Motorists (UM/UIM) Coverage
Pays up to the coverage limits for pain and suffering which is not covered by medical, disability and PIP.
- Collision Coverage
Covers for damage to your vehicle or a vehicle you are operating caused by a collision or rollover.
- Rental Reimbursement
Pays up to a specified amount for rental vehicle charges while your vehicle is being repaired for damage covered under your policy. If you prefer not to incur the cost of renting a vehicle yourself and cannot be without a vehicle while yours is being repaired, you might consider this coverage.
- Towing and Labor
Covers some costs incurred for services rendered at the place of breakdown or for towing to a repair shop.