A Comprehensive Guide To Your Auto Insurance Policy
An insurance policy is a kind of legal contract between the insurer and the insured, and the auto insurance policy is no exception to this. However, the legal lingo contained therein puts off most people from going through them thoroughly. Nevertheless, one should at least try to understand the terminologies used in an auto insurance policy and get to know what he/she is getting by way of purchasing the policy. Apart from the standard clauses that are governed by statutory insurance acts and rules that forms part of the policy, a vehicle insurance policy contains benefits and/or reimbursements whenever a 'claim' arises which are briefly described below.
Incidentally, the "Insurer" here is the insurance company that sells the policy and the "Insured" is the person who buys the policy and is thus 'covered' by it. And the "Coverage" stands for the various risk factors that the insurance company accepts to safeguard the insured by way of monetary settlement in Clay County, NE.
Here Is A Listing Of Some Of The Common Coverage's In Your Car Insurance Policy
- Liability or BI/PD Liability consists of Bodily Injury and Property Damage (BI/PD) that covers the insured's legal liability (up to a pre-determined limit) for damages caused in an auto accident. Under BI/PD, the auto insurance company pays for damages to an injured individual as also for property damage that the insured is legally bound to pay on account of the accident. In the event of the insured being sued, the company also pays for the lawyer who defends the insured.
- MedPay or Medical Payment covers the cost of reasonable and essential medical care that is to be provided to the insured (no matter whoever is at fault) as a result of the car accident. However, this is often limited to a specified time period (maximum 3 years) and has a pre-determined financial limit.
- PIP or Personal Injury Protection also known as 'No-fault Insurance' covers the insured person's medical bills when he/she is involved in a car accident up to a pre-determined limit. It also covers the cost of personal services that the insured has to pay others for doing the same to him/her.
- UM/UIM or Uninsured/Underinsured Motorist coverage provides for what the insured would have got from the other person's car insurance company if that person had been adequately insured. It may also protect the client if the other person who has caused the damage does not have the necessary insurance coverage. In some states, Uninsured Motorist Property Damage coverage provides protection against damage to property caused by anyone having no insurance coverage at all.
- Collision coverage pays for the damages to the insured's vehicle. This coverage usually has deductible amounts that the insured pays in the event of a claim, before the auto insurance company comes to his/her rescue.
- Comprehensive coverage pays for sundry damages suffered by the vehicle on account of theft, pilferage, vandalism, fire, flood, etc. Moreover, it covers the cost of rental (up to a reasonable daily limit) in the event of the insured's car being stolen. It often carries that same deductible limit.