Liability Coverage
The liability coverage of the
personal auto
policy provides protection against
legal
liability arising out of the
ownership or
operation of an automobile. The
insuring
agreement agrees to pay damages
for bodily
injury or property damage for
which the insured
is legally responsible because
of an automobile
accident.
The liability limit can be written
as a single
limit that applies to both bodily
injury
and property damage. The policy
can also
be written with split limits
in which the
limits of insurance for bodily
injury and
property damage are stated separately.
The insuring agreement also states
that in
addition to the payment of damages
for which
the insured is legally liable,
the insurer
also agrees to defend the insured
for all
legal defense costs. The defense
cost is
in addition to the policy limits.
Uninsured/Underinsured Motorist Coverage
Uninsured Motorist Coverage
This insuring agreement pays
for bodily injury
to an insured who is injured
by an uninsured
motorist, a hit-and-run driver,
or a driver
whose insurer becomes insolvent.
Some states
offer coverage for property damage
as part
of the uninsured motorist coverage.
Usually
when property damage is added
a deductible
would apply.
Underinsured Motorist Coverage
This coverage can be added to
the policy
to supplement the uninsured motorist
coverage.
The coverage must be added to
all automobiles
listed on the policy, and it
must be added
for the same limit as the Uninsured
Motorist
Coverage. Underinsured motorist
coverage
applies when a negligent driver
has liability
limits at the time of an accident,
but the
liability limits carried may
be insufficient
to pay for damages that the negligent
driver
is responsible for. This is when
the insured's
underinsured motorists coverage
would apply
and payment for the difference
could be made.
The two coverages are mutually
exclusive
and do not overlap or duplicate
each other.
An insured can collect under
one coverage
or the other depending on the
situation,
but not under both.
Physical Damage Coverages
Collision Coverage
This coverage provides protection against
the upset of your auto or non-owned auto
or a collision with another vehicle or object.
Collision losses are paid regardless of fault.
Comprehensive Coverage
This coverage provides protection
against
any loss or damage to a covered
auto resulting
from loss other than a collision
or upset,
or a loss specifically excluded.
This coverage
also provides for supplemental
payments for
transportation expenses in the
event of total
theft of a covered auto or a
non-owned auto.
The auto must be insured for
comprehensive
or specified cause of loss coverage.
Coverage
begins forty-eight hours after
a theft of
a covered auto. Payments end
when the auto
is returned to use or the insurer
pays for
its loss.
Endorsements
Extended Transportation Expense Coverage
(Rental Reimbursement)
This coverage applies when a
covered auto
or non-owned auto is withdrawn
from use more
than twenty-four hours due to
a loss, other
then theft. The insuring agreement
agrees
to pay up to the stated amount
for expenses
incurred in renting a vehicle.
The coverage
usually carries a per day limit
and a maximum
amount limit.
Towing and Labor Coverage
This coverage pays for towing and labor cost
each time a covered auto or non-owned auto
is disabled, up to the stated amount.
Personal Injury Protection (PIP)
This is an endorsement that adds
no-fault
benefits. No-Fault means that
in the event
of an automobile accident, each
party collects
from his or her own insurer regardless
of
fault. No-fault benefits are
limited to the
injured person's actual economic
loss, and
are paid as specified by the
law of the insured's
state. Payment could be made
for such losses
as loss of earnings resulting
from bodily
injury and medical and funeral
expenses.
Other expenses can also be considered.
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