Types of Auto Coverages

Choosing the auto insurance coverage levels that are right for you requires your careful consideration of many factors. Put simply, you will want to take into account everything you need to protect, and all the reasons you have for wanting to protect them. You're the only one who can decide what's best for your unique situation.

The following information briefly explains the mechanism of the personal auto policy, as well as the persons and actions typically covered under such policies.

Anatomy of the personal automobile policy

Declarations page: Your Personal Automobile Policy is a written contract between you and your insurer. The policy's declarations page contains accurate information concerning you, as the owner of the policy, the vehicles covered by the policy and other identifying features.

Part A--liability coverage: Liability coverage insures you against injuries you cause to other people and damage you cause to other people's property in an automobile accident. Liability claims for pain and suffering can be virtually limitless, so this is one area in which you definitely do not want to be underinsured. The PAP separates liability coverage into two parts: bodily injury coverage and property damage coverage.

Part B--medical payments coverage: Medical payments coverage (med pay) pays medical expenses resulting from an automobile accident up to a specified dollar limit. The purpose of "med pay" is to provide payment for immediate medical treatment for passengers of your car who are injured in an auto accident. Because of this, there's no need to wait and find out who is at fault and ultimately liable.

Part C--uninsured/underinsured motorist coverage: This coverage insures you against losses caused by someone who is completely uninsured or who has less than adequate insurance to cover the loss (underinsured).

Part D--coverage for damage to your auto: Part D coverage actually consists of two separate parts: collision coverage and comprehensive coverage. You can purchase either one or both of these coverages for each vehicle you own. In general, collision coverage insures you against damage to your vehicle caused in an accident. Comprehensive coverage insures you against all other physical damage to your car caused by such events as fire, theft, flood, and vandalism. These coverages can be written with or without a deductible (generally, anywhere from $100 to $1,000). The higher the deductible, the lower the premium, and vice-versa.

Part E--duties after an accident or loss: This part of the PAP deals with the specific procedures that must be follow in order to have your claim covered by the insurer. It contains a list of general and specific duties that must be complied with. It's essential to follow these procedures carefully, since timely payment of your claim may depend on your doing so.

Part F--personal auto policy provision: Part F of the PAP contains various provisions that limit and qualify the coverage provided in other sections of the PAP. Such provisions are commonly referred to as disclaimers. If the conditions set forth in this section are not met, the insurer may be able to deny coverage of a claim.

In addition to these basic parts included in every policy, there are certain optional coverages which can be purchased at an additional cost.

What's not covered

Exclusions: Your PAP identifies a number of events and situations that are specifically omitted or excepted from coverage. These are called exclusions. An example would be property damage and personal injury that you intentionally caused, or damage to a vehicle from normal wear and tear or mechanical breakdown.

Limitations: Your PAP also specifies certain caps on the dollar amounts of coverage you are entitled to receive under the policy. These are called limitations. Separate limits are generally set for liability, medical payments, uninsured motorists, collision, and comprehensive coverages.

It's important to read your PAP so that you're aware of all the applicable exclusions and limitations.

Individuals typically covered under a PAP

Named insured: One section of the declarations page identifies you as the named insured, meaning you are the individual who is primarily insured under the policy. As the named insured, you and your vehicles receive the most extensive coverage under your policy.

Spouses: Your spouse is generally entitled to receive the same coverage as you (the named insured) under your policy if he or she lives with you, even if he or she is not identified as a named insured on the declarations page of your policy.

Family members: Family members (as defined in your policy) are insured by your PAP as long as they own, use, or maintain the vehicle covered by the policy. In fact, family members generally receive almost the same extensive coverage that you do.

Other people: If your covered auto is involved in an accident, other people are insured under certain sections of the policy if:

• they were using the covered auto (liability coverage),
• they were occupying the covered auto (uninsured motorists and medical payments coverages),
• they are legally responsible for the actions of any other person insured under the policy (liability coverage), or
• they are entitled to recover due to any bodily injury suffered by you, your resident spouse, family member, or anyone using the covered auto (uninsured motorists coverage).

If a vehicle other than a covered auto is involved, other people are insured under your policy as long as:

• they are not the vehicle's owner and they are legally responsible for the actions of any other person insured under the policy (liability coverage), or
• they are entitled to recover due to any bodily injury suffered by you, your resident spouse, or relative (uninsured motorists coverage).

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