One of the first steps to determining what automobile coverage you need is understanding the insurance terminology on your automobile policy. Below you will find a glossary of coverage terms and basic definitions. If you would like more detailed information, please refer to the article specifically discussing each topic.
Bodily Injury Liability – This refers to the liability amount of coverage available if you are responsible for an accident and people in another vehicle are injured. It pays for medical expenses, wages lost due to missing work, death benefits, and more. Typically it is expressed with one dollar amount applying for a single person’s expenses and another as the absolute limit the policy will provide total for any given accident. This coverage is important to protect your financial assets since, under some circumstances, you can be pursued personally for damages not covered under your automobile insurance policy.
Property Damage Liability – Usually expressed in a dollar amount per accident, this limit indicates how much the insurance company will pay to fix or replace another vehicle that you’re responsible for damaging in an accident. Again, it is important to carry enough liability coverage to protect your financial assets as you can be pursued directly for damages not covered by your policy.
Uninsured Motorist Bodily Injury Liability – This is one of the more confusing coverage options. In general, it provides you and the people riding in your car the same protection afforded to others under Bodily Injury Liability in the event you are hit by someone without adequate insurance coverage or the victim or a hit and run driver. In Florida, you can choose between stacked and non-stacked uninsured motorist bodily injury coverage. Stacked means the coverage limits are multiplied by the number of vehicles on your policy, non-stacked means the coverage limits are as stated. Stacked can also extend this coverage to vehicles you own and insure in another state and extend to motorcycles insured on separate policies.
Personal Injury Protection – This is also referred to as no-fault protection. While some other states have a form of personal injury protection, the information contained here refers specifically to Florida. Personal injury protection provides $10,000 per person for covering medical expenses (up to 80%), lost wages (up to 60%), and a couple of other smaller benefits. The coverage applies regardless of who is responsible for an accident and is the first coverage under which medical expenses are paid if you’re injured.
Medical Payments – This coverage pretty straightforward. It offers a specific amount of coverage per person to cover medical expenses incurred due to injuries from a car accident. It provides coverage for you and people in your vehicle regardless of who is responsible for the accident.
Comprehensive – This coverage is vehicle specific. Typically in covers you car up to its actual cash value, minus a deductible you can choose. It covers damage from storms, hail, a tree falling on your car, theft, glass breakage, and collision with an animal. In Florida, broken windshields are repaired or replaced without a deductible applying.
Collision – Like comprehensive coverage, it is vehicle specific. It covers the vehicles on which you choose the coverage for damage caused by an accident for which you are responsible, whether it involves another vehicle or not. A deductible typically applies and most insurance companies cover your vehicle up to its actual cash value.
Rental Reimbursement – Typically vehicle specific, it provides a set amount of money per day up to a total amount of coverage to rent a replacement vehicle while your vehicle is being repaired. It generally only applies if the vehicle is being repaired due to damage from a covered incident, not if it is simply in the shop for routine repairs.
Roadside Assistance/Towing & Labor – This coverage provides different benefits depending on your insurance company, however in general if provides coverage for towing your vehicle to the nearest repair facility if it breaks down, help fixing a flat tire, and assistance if you run out of gas. Some companies offer it on a vehicle by vehicle basis while others apply it to a whole policy or not at all. It is generally an inexpensive coverage to include on your policy.
For additional questions or comments, please contact me at Dimmitt Insurance: