To protect yourself from the possible financial responsibility of an automobile accident, it makes sense to have adequate coverage in place, based on your particular financial needs.
If you have any doubts about the appropriate level of automobile coverage that’s right for you, we have a broad variety of options through many insurers, and are happy to work with you to find the best buy for your needs.
What is an Auto Policy?
-An Auto Policy, or “Auto Insurance”, is a contract that you have with an insurance company in which you agree to pay a premium, and in the event of an accident, the company agrees to pay for your covered damages, as outlined in your specific auto policy.
Every “Auto Policy” may include six coverages and each one is priced separately. These six coverages include:
1. Bodily Injury Liability
This coverage applies to any physical harm you, the designated driver, or policy holder cause to someone else or some thing. You and family members listed on the policy are also covered when driving someone else’s car with their permission. When buying this it is important to consider buying more than the state-required minimum to protect assets such as your home and savings.
2. Medical Payments or Personal Injury Protection (PIP)
This coverage pays for the treatment of injuries to the driver and passenger’s of the policyholder’s car. PIP can also cover lost wages, medical bills, and the cost of replacing services normally performed by someone injured in an auto accident.
3. Property Damage Liability
This coverage pays for the damage you or someone driving you car caused to another vehicle. This also includes damage to other’s properties (lamp posts, mailboxes, fences, buildings, etc).
This coverage pays for damage to your car resulting from a collision with another car or object, it also covers damage caused by potholes. Collision is usually sold with a deductible of $250 to $1000-the higher your deductible, the lower your premium. Loss caused by the following is considered other than collision:
- Missiles or falling objects
- Theft or larceny
- Explosion or earthquake
- Hail, water or food
- Malicious mischief or vandalism
- Riot or civil commotion
- Contact with bird or animal
- Breakage of glass
This coverage reimburses you for loss due to theft or damage caused by something other than a collision with another car or object, such as fire, falling objects, missiles, explosion, earthquake, windstorm, hail, flood, vandalism, riot, or contact with animals such as birds or deer. Comprehensive insurance is usually sold with a $100 to $300 deductible, although you may want to opt for a higher deductible as a way of lowering your premium.
6. Uninsured and Underinsured Motorist Coverage
This coverage will reimburse you, a member of your family, or a designated driver if one of you is hit by an uninsured or hit and run driver. Underinsured motorist coverage comes into play when an at fault driver has insufficient insurance to pay for your total loss. This coverage will also protect you if you are hit as a pedestrian.
- Underinsured Motorists Conversion Coverage- If the Schedule or Declarations indicate that Underinsured Motorists Conversion Coverage applies, the following provisions apply:
– The definition of underinsured motor vehicle is replaced by the following: “Underinsured motor vehicle” means a land motor vehicle or trailer of any type for which the sum of all payments received by or on behalf of the insured, from or on behalf of any persons or organizations who may be legally responsible, is less than the fair, just and reasonable damages of the insured.
-Uninsured/Underinsured motorist coverage is very important in case you have an accident with someone who is under or not insured at all. The conversion option will protect you in that your policy will pay from dollar one, not being offset by the other policy regardless of amount. If you have an accident and your policy doesn’t have conversion and the other parties insurance is exhausted, your policy will not pay without this coverage. This is a nuance of insurance that is very inexpensive but also critically important.
– With respect to coverage provided under the above definition of underinsured motor vehicle, Paragraph B. of the Limit Of Liability provision does not apply.
The following are key terms and definitions you will find associated with all “Auto Policy” agreements:
Bodily Injury- physical harm, sickness or disease, including death that results.
Business- includes trade, profession or occupation.
Family Member – a person related to you by blood, marriage or adoption who is a resident of your household. This includes a ward or foster child.
Occupying – In; Upon; or Getting in, on, out or off.
Property Damage – physical injury to destruction of or loss of use of tangible property.
Trailer – a vehicle designed to be pulled by a private passenger auto, pick up, or van.
Your Covered Auto –
- Any vehicle shown in the Declarations.
- A newly acquired auto
- Any trailer you own.
- Any auto or trailer you do not own while used as a temporary substitute for any other vehicle described in this definition which is out of normal use because of its: Breakdown; Repair; Servicing; Loss; or Destruction.
Newly Acquired Auto – any of the following types of vehicles you become the owner of during the policy period:
1. A private passenger auto
2. A pickup or van, for which no other insurance policy provides coverage that: (1) Has a Gross Vehicle Weight Rating of 10,000 lbs. or less; and (2) Is not used for the delivery or transportation of goods and materials unless such use is: (a) Incidental to your business of installing, maintaining or repairing furnishings or equipment; or (b) For farming or ranching.
1. You or any family member for the ownership, maintenance or use of any auto or trailer.
2. Any person using your covered auto.
3. For your covered auto, any person or organization but only with respect to legal responsibility for acts or omissions of a person for whom coverage is afforded under this Part.
4. For any auto or trailer, other than your covered auto, any other person or organization but only with respect to legal responsibility for act or omissions of you or any family member for whom coverage is afforded under this part. This Provision applies only if the person or organization does not own or hire the auto or trailer.
Uninsured Motor Vehicle – a land motor vehicle or trailer of any type:
1. To which no bodily injury liability bond or policy applies at the time of the accident.
2. To which a bodily injury liability bond or policy applies at the time of the accident. In this case its limit for bodily injury liability must be less than the minimum limit for bodily injury liability specified by the financial responsibility law of the state in which your covered auto is principally garaged.
3. Which is a hit and run vehicle whose operator or owner cannot be identified and which hits: (A) You or any family member; (B) A vehicle which you or any family member are occupying; or (C) Your covered auto.
4. To which a bodily injury liability bond or policy applies at the time of the accident but the bonding or insuring company: (A) Denies coverage; or (B) Is or becomes insolvent.
Non-owned auto – Any private passenger auto, pickup, van or trailer not owned by or furnished or available for the regular use of you or any family member while in the custody of or being operated by you or any family member; or Any auto or trailer you do not own while used as a temporary substitute for your covered auto which is out of normal use because its: