types of car insurance coverage explained

2016 08 10 Umbrellagroup Coverages

We won't pretend understanding insurance is easy. So just in case you're one of the millions who doesn't have enough time to decode insurance jargon and technicalities, here's a quick translation:

Liability Insurance: Bodily Injury and Property Damage

Bodily Injury and Property Damage are the two coverage options you may hear people refer to as "liability insurance". Unless you live in the state of New Hampshire, every driver is required to have at least the state minimum amount of Bodily Injury and Property Damage coverage on their policy. You'll often see both coverages written as two numbers, like so: $25,000/$50,000. The first number is the amount your insurance will cover per person and the second is the amount it will cover per incident. You'd be responsible for paying any costs that go above those limits. 

So, say you get into an accident and it's your fault. Bodily Injury coverage is what's going to help pay for any potential medical bills and lost wages for the other driver and/or passengers. Property Damage is there to help cover the costs of repairing or replacing the other driver's car or any other property damaged in the accident. It's important to note that these coverages do not cover any of your medical bills or auto repairs.

Example: You accidentally hit a guy. As a result, he gets whiplash, and his car takes out a fence. Your Bodily Injury coverage would help pay for his doctor visits, pain prescriptions and any physical therapy needed to treat his injury. Your Property Damage coverage would be used to help repair his car as well as the fence.  

Collision:

No matter who is at fault, Collision helps you fix or replace your vehicle after an accident. The accidents covered could involve another car, an object (such as a telephone pole) or your car alone. It's important to note that Collision coverage is considered optional in all states, but if your vehicle is financed or leased, the lender may require you to purchase a policy with Collision coverage.

Example: On a winter drive, you come across a patch of black ice and slide into a curb. Luckily nobody was injured, but your bumper, wheel and axle take quite the hit and require repairs. You pay your deductible and your Collision coverage pays the rest, up to the coverage limit.

Comprehensive:

This is what people refer to as "other than collision" coverage. It's what protects you from paying the full cost of damages caused by non-accident related incidents like vandalism, theft, fire, animals and Mother Nature. Like Collision, if you finance or lease a car, you may be required to purchase Comprehensive coverage.

Example: During a thunderstorm, a lightning strike sends a branch plunging through your car's sun roof and windshield. After covering your poor car with a tarp to prevent excess water damage, you file a claim to have your Comprehensive coverage help pay for the repairs.

New Vehicle Replacement: 

Included in Comprehensive and Collision coverage

In a covered claim, we would typically pay the comparable value of your vehicle at the time of the accident. You may, however, qualify to receive additional payment above the comparable value in order to replace your vehicle with a new, similarly-equipped auto of the same make, model and model year if you meet the all three of the following requirements:

  1. You became the owner of the vehicle at its original sale
  2. You purchased the car within 12 months of the date of the accident
  3. The vehicle had been driven less than 15,000 miles at the time of the accident

Uninsured Motorist:

You might also see this one listed as Uninsured Motorists Bodily Injury coverage. Basically, if you're hit by someone who doesn't have car insurance or flees the scene, Uninsured Motorist coverage steps in to pay any medical costs and lost wages you might face related to the accident.

Example: You get hit by an uninsured driver and it's their fault. The x-rays show you have a broken collar bone that will require surgery, and your doc wants you to rest a full week. Your Uninsured Motorist coverage will help pay for the x-rays, surgery, follow-up visits and pain medication as well as compensate you for the days you had to take off work.

Uninsured Motorists Property Damage:

In the same way Uninsured Motorist coverage protects your body, Uninsured Motorists Property Damage (UMPD) protects your car. In the case that someone without insurance hits your car and is at fault or you're on the receiving end of a hit-and-run, UMPD can help pay for the damages done to your vehicle.

Example: You come out of the grocery store to discover someone grossly miscalculated the space they had to park next to you. Now the spot is empty and your car's side is completely dented and scraped. UMPD coverage can help cover the costs to repaint and rid your ride of dents.  

Medical Payments:

So we've already covered Bodily Injury coverage, which takes care of the other driver's medical costs if you caused an accident. Medical Payments is an optional coverage that helps take care of you and your passengers, regardless of fault.  It also moves with you, meaning it can cover you if you're hit by a car walking, riding shotgun with a friend or even on public transportation.

Example: You decide to bike to work and someone forgets to check blind spots before changing into your lane. You get hit, fall to the ground and hit your head. While you feel mostly okay, the paramedics on the scene take you to the hospital to get a CT scan. Unfortunately, it's only your third week on the job and your insurance hasn't kicked in yet. Luckily you added Medical Payments coverage to your policy and it helps cover the bill.

Rental Reimbursement:

Rental Reimbursement coverage can be purchased to help cover the costs of a rental when you're unable to drive your vehicle as a result of incident covered by Collision or Comprehensive. It's meant to step in when your car is being repaired in a shop, but doesn't count towards regular maintenance or repairs needed beyond a covered accident. Since this is just for Collision and Comprehensive accidents, if you're in an accident and it was the other driver's fault, his or her insurance company should provide a rental for you.

Example: A huge hailstorm blows through your town and takes out your windshield and destroys the hood of your car. You file your Comprehensive claim and get an appointment set for the following day. Using your Rental Reimbursement coverage, you're able to arrange a rental to meet you at the shop to use the two days it will take to get your car back.

Say's Roadside Assistance

There are a million ways you can find yourself stranded on the side of a road, which is why Say includes Roadside Assistance coverage in every policy. The coverage pays for up to $100 worth of services each time you have an incident (outside of claims-related tows and emergencies). Think dead battery, overheated engine, flat tire, lockout, tow to mechanic, etc.

Example: You're on the way home from a road trip and just outside of your town, your car loses its ability to maintain speed and begins to deaccelerate. You pull over and realize your transmission gave out. Knowing there's no way you can get to a mechanic without a tow, you call Say's Roadside Service number at (855) 817-6510 to send a truck. The ride ends up costing $80, but because of your Roadside Assistance coverage, it's fully taken care of.


*The product information contained on this website is informational only and not a statement of contract. All coverage options are subject to the provisions of the policy purchased and details of the policyholder's situation.