Auto Insurance: Do You Know What's Covered?

Published in Personal Insurance News & Insights on Friday, October 16, 2020

Your vehicle is your main source of travel to get from Point A to Point B. Without it, how would you get everywhere you need to go in a busy day? What if something went wrong?
•    Do you know what is covered if you are in an accident?
•    How often do you review your policy and understand the coverages you have?
•    What is your deductible amount?

Knowing the key parts of the auto policy can help you when an accident happens.

This covers injuries or damage that you, a designated driver or policy holder causes to someone else or their property. This does not cover the cost of damage to your vehicle, or to you or other people on your policy.

  1.  Bodily Injury Liability (BI) covers claims including medical bills, loss of income, or pain and suffering of someone else injured in an accident.
  2.  Property Damage Liability (PD) covers the other person's vehicle that was hit, but may also be a fence, telephone pole, house, etc. It may also provide you with legal defense if another party files a lawsuit against you.
  3. Medical Payments (MP), also known as Personal Injury Protection (PIP), is a no fault coverage that provides medical expenses to you and your passengers that are injured in an accident. It may cover policyholders and their family members when injured while riding in someone else's vehicle or when they are hit by a vehicle on foot/bicycle.

Keep in mind, your automobile insurance follows the vehicles that are listed; it does not follow the driver. If Joe borrows Jane's car to go to the store and is in an accident on the way home, whose insurance will cover the accident? Jane's auto insurance will cover the accident. Not Joe's.

This covers your vehicle in certain accidents.

  1. Collision covers damage to your vehicle when it hits, or is hit by, another vehicle or object and pays to repair your vehicle, less your deductible.
  2. Comprehensive (Other Than Collision) covers damages to your vehicle if it is stolen, damaged by flood, fire, falling objects, animals, or any incident other than collision resulting in a loss.

Many people don't know there is a difference between repair and replacement of a window/windshield when it is chipped. If your windshield has a chip in it and only needs repaired, the deductible is waived. The sooner you have it repaired, the less likely it will crack and cause enough damage that the windshield needs replaced. You would pay the deductible if the windshield needs replaced, so you can save money by fixing it as soon as possible.

Towing coverage is one you should really consider, if you aren't already covered. Most insurance companies have an 800-number that you can call when in need of a towing service. They will tow your vehicle to the appropriate place and all you have to do is sign for it, no need to pay out of pocket (as long as you have the coverage).

It is your right and responsibility to know what your insurance policy covers and to do your best to prevent accidents from happening. Owning a car with safety features such as anti-lock brakes, airbags, or installing an anti-theft device is just another way to save on your auto premium. We know accidents happen and all of us at PDCM Insurance want you to be prepared. Keep a look out for upcoming posts on what to do when an accident happens. Here at PDCM, we are more than happy to review your policy with you and encourage you to know what your insurance policy will cover. Contact your agent at PDCM with any questions or concerns you may have and ask about any discounts that you are eligible for.