Automobile Insurance consists of two broad components of coverage: liability protection and property repair and replacement. Nearly all states require vehicle owners to carry at least some minimum amount of liability insurance.
Types of Coverages
A basic Automobile Insurance includes some of all of the following coverage:
- Bodily Injury Liability and Property Damage Liability
Bodily Injury Coverage pays for the personal injury costs that the insured causes upon a third party in an accident, including medical bills, lost wages, pain and suffering, and all of the associated legal fees. Property Damage Coverage pays for the replacement or repair of the property that was damaged or destroyed by the insured.
Pays for the repair of the insured's own vehicle that was damaged by an accident.
Pays for damages to the insured's vehicle from causes other than accidents, such as fire, theft, vandalism, natural disasters, and animals.
- Medical Payments Coverage
Pays for medical expenses incurred by the driver and his or her passengers as a result of an accident, regardless of who was at fault.
- Personal Injury Protection and No-Fault Coverage
Pays for medical expenses, lost wages, and funeral expenses for the driver and his or her passengers who are injured in an accident.
No-fault coverage pays for losses, regardless of who was at?fault in the accident.
- Uninsured/Underinsured Motorists Coverage
Uninsured Motorist (UM) coverage pays for the insured’s own medical bills after suffering an accident with another driver who does not have automobile insurance. This coverage is required in most states. Uninsured Motorist Property Damage may also be purchased separately if the insured does not otherwise have physical damage coverage.
Underinsured Motorist (UIM) coverage takes effect when the insured is struck by a driver who does not have sufficient automobile insurance to cover the insured's medical bills. In this instance, the at-fault driver's insurance would pay its maximum, with the remainder to be paid by the insured's own policy, also up to its policy limits. Underinsured Motorist Property Damage may also be purchased separately if the insured does not otherwise have vehicle physical damage coverage.
There are several important endorsements that are available to enhance an automobile coverage:
- Rental Reimbursement Coverage pays for a rental car if the insured's vehicle is lost or stolen.
- Loss of Earnings Coverage reimburses the insured for lost income when his or her vehicle is unusable and a substitute is not available.
- Towing and Labor Coverage pays for fees caused by breakdowns.
- Gap Coverage for new vehicles pays the difference between the actual cash value of the vehicle and the remainder left on a vehicle lease or loan if the vehicle were totaled.
* The insurance coverage discussed herein is for general information purposes and may vary state-by-state. Every insurance policy and customer is unique. Please consult a DSG Insurance team member or another insurance agent to assist you with the particular facts and circumstances of your case.