An automobile insurance policy comprises
several coverage. They are either mandatory or optional.
Bodily Injury Liability
This coverage pays for claims and lawsuits brought
by people who are injured or die as a result of an accident caused by insured.
Property Damage Liability
This coverage pays for claims
and lawsuits brought by people whose property is damaged as a result of an accident
caused by insured.
Medical Payments
This coverage pays the insured for medical expenses arising from an automobile accident while the insured is in the
insured vehicle or someone else's vehicle. It may also cover medical expenses if
the insured is injured
by a vehicle while walking or bicycling, regardless of who is at fault.
Personal Injury Protection (PIP)
This coverage pays for medical expenses, rehabilitation,
lost wages, payments for child care, funeral expenses and other damages to the insured.
Collision
This coverage pays for the payment to repair the insured vehicle, or the cash value of
the insured vehicle if it is not repairable when the insured vehicle is involved
in an accident. It is subject to deduction if the insured is at fault.
Comprehensive
This coverage provides coverage
for an insured vehicle that is lost due to theft or damaged by an incident other
than a collision with another vehicle or object, such as vandalism, flood, fire,
falling objects, earthquake, windstorm, hail, riot, or contact with animals.
Uninsured Motorist Coverage
This coverage pays property damage or bodily injury of the
insured caused by
a uninsured or hit-and-run motorist.
Underinsured Motorist Coverage
This coverage pays property damage or bodily injury of the insured caused by a motorist who is insured, but whose coverage is insufficient
to cover the damage and/or injury.
Loan/Lease Payoff Coverage
It is also called Gap Insurance.
This coverage pays for the difference between what the insurance company pays and
the amount that the consumer owes the leasing or finance company when the insured
vehicle is declared a total loss or is stolen and not recovered.
Loss of Use Coverage
This coverage pays for the cost of other transportation like renting
a vehicle, hiring a taxi or using public transportation when the insured vehicle
is being repaired.
Car Towing Coverage
This coverage pays for towing a vehicle, delivery of gasoline, change of a flat tire, etc.