Auto Insurance
If you own your own car, you probably already know a little about car insurance. You may have heard the words deductible or premium. But, do you truly understand the different parts of an auto insurance policy and do you know how to choose the best coverage?
Below are some simplified descriptions of common auto insurance coverages. All coverages are subject to the limits, terms and conditions of the actual policy you purchase.
Bodily Injury Liability Coverage pays damages for injuries to the driver and passengers of the other vehicle when you are responsible for an accident. It provides coverage to defend you and protect your assets if you are sued. Your policy will show two limits (for example $100,000/$300,000). The first is for any one person; the second is the total coverage limit for one accident.
In Massachusetts there are two coverages that are easy to confuse: Bodily Injury to Others which is always covered at $20,000/$40,000 limits. It provides coverage for injury or death to others only if the accident occurs on Massachusetts public roadways (parking lots excluded). Optional Bodily Injury allows for higher limits of coverage and covers accidents that occur both in and outside of Massachusetts. It is called “optional”, but we do not recommend you skip this coverage.
Property Damage Liability Coverage pays for damages to another person’s property when you are responsible for an accident. It also provides coverage to defend you if you are sued because of an auto accident.
Some states – including Massachusetts – have Personal Injury Protection (PIP) in place of, or in addition to, medical payments coverage. This is also known as “no-fault coverage”. PIP can generally pay for medical expenses, funeral expenses, loss of income and other expenses for injuries or death due to bodily injury sustained as the result of a car accident for you or anyone you let operate your vehicle, any household member, passengers and pedestrians regardless of who causes the accident.
Medical Payments Coverage generally covers you, household relatives and your passengers for medical expenses that result from injuries sustained in an auto accident. It also covers you as a pedestrian if you are hit by a vehicle.
Uninsured or Underinsured Motorist Bodily Injury Coverage pays for damages for bodily injury to you, your household members, and your passengers when caused by another in an auto accident and the person legally responsible either has inadequate or no insurance. This coverage varies greatly by state. In some states it may be a combined coverage, while other states may offer it as two separate coverages (e.g. one for uninsured motorists and one for underinsured motorists).
Collision Coverage pays for damage to your car if it hits another car, object, or overturns. A deductible may apply to this coverage.
Comprehensive Coverage pays for damage to your car if it is stolen or damaged by certain causes other than collision, such as fire, theft, hail, falling objects, collision with an animal, earthquakes, vandalism, etc. This is also the coverage that is involved when you have a broken or damaged windshield or other auto glass. A deductible may apply for this coverage.
Emergency Road Service/Towing requires that you have comprehensive coverage. Usually a big help for events such as getting locked out of your car, when you need towing, jump starts, etc. Check your policy or speak to your insurance specialist for details.
Rental Reimbusement – requires that you have comprehensive coverage. Pays toward the expense for alternate transportation while repairs are being completed for a covered loss. Recommended for any family that does not have a replacement vehicle.