Your liability limit PROTECTS YOU when you are held responsible or found negligent in an accident. Whether you are held in whole or partially at fault this will pay for damages, medical expenses, lost wages and other consequences suffered by those injured as a result of the accident.
Split and/or Combined Limits
There are two ways to purchase your auto liability limits. They are "split" or "combined single" limits. The difference between the two is exactly as it sounds by either combining bodily injury and property damage into one lump sum or splitting them into separate "buckets".
Split limits of liability will break down the bodily injury into maximums of per person and per accident leaving property damage with it's own special limit. Most policyholders will usually see split limits of liabiliy. Whether it is 25/50/25, 100/300/100, 250/500/250 or something in between, the first number is always the bodily injury per person limit. The second is bodily injury per accident limit and the last property damage.
A combined single limit policy would provide one maximum limit for all bodily injury and property damage claims.
While price and affordability is an important part in deciding to purchase a lower limit, can you afford not to protect yourself with more?
Look at the price of newer cars today. $25-$45,000 average MSRP. Would the minimum $25,000 property damage limit be enough to cover the damage of an extreme accident? What if you collided and pushed that vehicle into a second? Will your property damage limit be enough to cover both plus additional expenses?
It's important for us as agents to know our customers and point these intricacities out to help them and you understand the importance of not just being properly insured but also adaquately insured.
Physical Damage Coverage
Physical damage is the general "group" term to describe Comprehensive and Collision coverage of the auto policy. They can be purchased together or separately and added to most vehicles. Prices very on a large magnitute of factors and include but are not limited to the type and age of the veh, driver history, loss expereince and garaging location. When purchased these cover the damage to your vehicle.
Be careful when asking for "Full Coverage". This can be like asking for a drink. (Would you like a soda, juice or coffee?) It is a broad term and can be interpretted to include one, both or several additional and optional coverages.
Comprehensive - This coverage applies when your vehicle is stolen or vandalized, catches fire, your strike a deer or other wild animal, or storm damage. Glass repair/replacement is also included.
Collision - This coverage pays for repairs to your vehicle as a result of a traiffic accident no matter who is at fault. It also covers damage to the vehicle that is the result of colliding with buildings, guard rails, sliding off into a ditch, or the deaded parking lot phantom hit.
Yes, if you discover damage to your vehicle after a shopping expierence and there were no witnesses or note left claiming fault, this coverage and its deducitlbe apply.
Medpay coverage is available on auto policies as an optional coverage. It covers you and any passengers in your vehicle, any pedestrians you may injure, and you—if you are riding as a passenger in another vehicle or are injured by a vehicle as a pedestrian, bike rider, or public transportation rider.
Limits of coverage can range from $1,000 to $100,000 depending on the insurance carrier. $5000 is the most common limit.
Medpay applies to a variety of expenses relating to injuries stemming from an automobile accident. It covers medical payments such as health insurance deductibles and co-pays, visits to a doctor or hospital, X-rays and surgery, ambulance and emergency medical technician fees, rehabilitation and nursing care, and some medical equipment, such as prostheses. The coverage takes effect regardless of which driver is considered at fault for the accident.
MedPay is supplemental to your health insurance; which one is primary coverage depends upon your health insurance policy.
Uninsured and Underinsured
Uninsured and underinsured coverage is an addition to your auto policy that depending on which state you reside can either be optional or mandatory. Your insurance carrier can provide this separately or combined. In Ohio, it is an optional coverage and we typically see it listed combined. For example: Uninsured/Underinsured Bodily Injury $100,000/$300,000.
While many carriers may list this combined on your declaration they are not the same.
Uninsured Bodily Injury
This coverage protects you and your passengers and will pay for injuries sustained when the responsible party invovled does not have insurance. Despite the mandates to require insurance, one in eight U.S. drivers on the road do not have insurance.
If you are in an accident with an uninsured motorist and do not have this coverage, you may not receive payments, even if the other party is at fault.
Underinsured Bodily Injury
This coverage protects you and your passengers in the event of an accident involving someone who doesn't have suffiecient coverage of their own. The insurance of the at-fault person is supposed to compensate the other injured person. If the other person only has the state minimum bodily injury limit ($25,000) and your injuries are $50,000 - This coverage would pay the difference up to your policy limit.
Uninsured Property Damage
This is an optional coverage that can be used to pay for damage sustained to your vehicle from an
uninsured motorist. It is typically used when collision coverage is no longer desired or available. You can add this coverage per vehicle with limits of $7,500, $10,000 and $25,000 with a deductible of $250
Additional & Optional Coverage (Endorsements)
Most insurance carriers provide serveral additional coverages that can be added (endorsed) onto an auto policy. The most common is transportation expense and road service. Other options can include loan/lease GAP, better or new car replacement and other enhancements.
When this coverage is purchased it will pay for a replacement vehicle (rental) while your regular vehicle is being repaired from a covered claim. Depending on the insurance company the options available are usually a per day dollar limit or class of vehicle (compact, sedan, suv, truck etc). This coverage could also be used to reimburse travel expense for fares depending on the circumstance. The typical cost usually averages the cost of a one day rental.
This optional coverage will reimburse or pay for the cost of service performed in a typical breakdown/tow, flat tires, lockout or dead batteries. Many insurance companies are partnering with third-party companies that can perform service duties on site.
Gap coverage is an optional per vehicle purchase and is used when your vehicle is severely damaged in an accident. When the damage or cost to repair is greater than the value of the vehicle it is considered "totalled". In this situation teh coverage could pay the difference, or gap, between the actual value of the vehilce and your loan.
Gap coverage is a wise choice in any of these circumstances:
In almost all circumstances you will find purchasing gap coverage through your auto insurance company is significantly less expensive than as an add-on to your loan. It is also important to note that this coverage will NOT pay for the inclusion of any negative equity. For example, a balance forward from a prior auto loan.
Other Enhancements, Pluses, Bigger-Better-Best Stuff
Almost all auto insurance companies have a wide range of extras available to purchase and enhance your policy. Depeding on the insurance carrier these extras can be purchased separately or in combinations.
These enhancements usually include "vanishing" or "disappearing" deductible, extra coverage for electronics, lost wage/death benefits, better or new car replacement, zero deductible glass breakage and increased policy limits to name a few.
you are buying a vehicle of significant value.
you are financing a new or used vehicle without a large down payment creating a "gap between the value and your loan.
you do not have significant cash savings that would allow you to cover the difference between your loan and the actual cash value of the vehicle if it were totaled or stolen.